HALIFAX, FRIDAY, APRIL, 8, 2011

 

SUBCOMMITTEE OF THE WHOLE HOUSE ON SUPPLY

 

9:37 A.M.

 

CHAIRMAN

Mr. Clarrie MacKinnon

 

MR. CHAIRMAN: Members and minister, we will now begin the Estimates of the Department of Agriculture.

 

Resolution E1- Resolved, that a sum not exceeding $61,115,000 be granted to the Lieutenant Governor to defray expenses in respect of the Department of Agriculture, pursuant to the Estimate, and the business plans of the Nova Scotia Crop and Livestock Insurance Commission and the Nova Scotia Farm Loan Board be approved.

 

MR. CHAIRMAN: I will call on the minister, without any extra time being used by the chairman, and he can introduce staff and begin with his opening comments.

 

HON. JOHN MACDONELL: Thank you, Mr. Chairman, and to my colleagues, I believe the members are familiar with the gentlemen accompanying me, but I'll introduce them anyway. To my right, Paul LaFleche Deputy Minister of Agriculture; to my left, Weldon Myers, Director of Finance for the Department of Agriculture; Leo Muise behind me; and Steven Stewart - I'm not sure, but at some point there may possibly be more staff, but for now thank you for the opportunity to speak for our government's commitment to undertake changes necessary to ensure a competitive, profitable and sustainable agricultural sector in Nova Scotia.

 

There is a lot of talk about it. Agriculture has always been a special topic for me as I grew up on a small farm in Enfield, pretty much a mixed farm.

 

 

1

 

MR. CHAIRMAN: Order. There is an audio problem and you're not being recorded. There is a problem with all microphones up in the control room and they're working on them now, so it is nothing that we have done or haven't done.

 

MR. MACDONELL: It looks like I have a microphone now.

 

MR. CHAIRMAN: Okay, thank you very much.

 

MR. MACDONELL: Thank you again, Mr. Chairman, and to my colleagues around the table I want to introduce the Deputy for the Department of Agriculture, Paul LaFleche, and the Director of Finance, Weldon Myers. Leo Muise, behind me, is with Compliance and Food Safety, and the depth and breadth of Mr. Muise's capability, I could use the four hours to - and Steven Stewart, who is with our communications staff. Anyway, I'm really pleased to be with you. I'm glad for an opportunity to speak about the government's commitment to undertake changes necessary to ensure a competitive, profitable and sustainable agricultural sector in Nova Scotia.

 

It has always been a topic close to my heart, I guess I can say. Members might remember 2009, issues around people's requests to get into Cabinet and when I was quizzed by the Premier I made the request to be the Minister of Agriculture. I had been the critic since 1998, so I have a very great interest in the topic.

 

Today we have a more specialized agriculture and the fact is the world is changing and we need to change with it. When I was a kid, our world was our neighbours, our community, and maybe our province. We were never exactly isolated from the world, but you get the point. We always seemed to operate in more of a closed system than we do today and depending on what sector you're in, that was a bad thing, perhaps. I would think that if you were an apple producer in the Annapolis Valley, thinking about supplying Nova Scotia's needs would not necessarily be the greatest business opportunity, but when we think about our emphasis now, trying to re-engage people on buying local, then we've come back to try to create an emphasis around our community and our neighbour in the hopes that people will start to think about where their food comes from and supporting their farmers locally.

 

Businesses in every sector of our economy have challenges they need to address and this is definitely true of the Department of Agriculture. Fuel prices and other inputs are higher than they've been in a long time. Farm incomes continue to go down. Getting started in any business is not an easy task, but in some agricultural sectors the start-up costs make it even more difficult. More and more farmers are required to document their environmental performance and that's what the public demands these days, but it takes time and money.

 

Consumers have more choice than ever before. We have made more trade agreements than ever before, which means not only new markets for our products, but also new competition. We know there are challenges in some of these things, but we are finding our advantages too. There is more competition for our producers, but we also have new markets for our products. Farmers are under increasing pressure to ensure environmental protection, but this is an opportunity to show consumers that Nova Scotia agriculture adheres to the highest environmental and food safety standards. While we recognize the challenges that our agriculture producers face, we also know that if we manage them right, we can seize opportunities.

 

It comes as no surprise that our government is committed to getting our fiscal house in order. My colleague, the Minister of Finance, outlined the numbers the other day when we were delivered his Budget Speech. I don't need to go on into detail or repeat what he said, but my message is the same - our government is committed to getting back to balance, creating good jobs, growing the economy, and improving health care for Nova Scotians. That's why Nova Scotia agriculture and agri-products industries are important, because they can help us address so many of these priorities.

 

Our primary industries are still at the heart of our economy. Agriculture, fishing, and forestry contribute significantly to the province's exports. These are the industries that bring in new wealth, grow our economy, and help pay for services like health care.

 

There is growth potential in agriculture if we can continue to seize our competitive advantages to know what makes us unique and market our products accordingly. It is more important than ever that if we invest our tax dollars in the industry we have to do it strategically.

 

I've long believed that if government is going to invest in agriculture, it should be strategic, with a long-term goal and direction in mind. These goals are to create long-term growth and focus on what makes Nova Scotia agriculture strong. The Department of Agriculture invested millions in agricultural projects through the Strategic Infrastructure Investment Fund over the past few years. These projects focused on improving on-farm and processing infrastructure, helping to modernize processes and making it easier for stakeholders throughout the value chain to work together on common areas.

 

We also made more strategic investment in recent years in buy local infrastructure such as farmers' markets. The Department of Agriculture continues to administer the very successful and popular Select Nova Scotia campaign to promote local sales of local products and tell consumers why buying local agriculture is a great choice. Research indicates that brand recognition of Select Nova Scotia has grown and it has an impact on consumers' knowledge and attitudes and, ultimately, purchase decisions.

 

An annual signature event for the department is the Incredible Picnic - it is held in communities across the province every August. These picnics are a chance for producers, chefs, and other food venders to showcase local food and promote greater consumer awareness, knowledge, and consumption of local agri-food and seafood products. Nine picnics were held last summer - in Halifax, Windsor, Truro, Kings, Kings County, Mabou, Musquodoboit Harbour, Hubbards, and Annapolis Royal. It is estimated that 10,000 people came out to meet more than 100 producers, wineries, restaurants, and farm organizations. Each event was lead by a local planning group armed with tools and assistants from the Department of Agriculture, and they were, by all accounts, great successes.

 

Over the winter months, my staff came up with a great way to promote the wide variety of fresh local foods available this time of year. That was Winter Fresh, the IncrEDIBLE February campaign. The winter food campaign extended Select Nova Scotia's presence by providing mid-winter community events in the spirit of the Incredible Picnic. Those events reinforced existing grassroots and community interest in local food and supported Nova Scotia's producers.

 

Last February, more than 35 community suppers were held around the province. Each featured local ingredients and educational activities that promote the Buy Local concept. Suppers were held in all corners of Nova Scotia, from Bay St. Lawrence, Cape Breton, to Yarmouth.

 

One of the questions people ask me about Buy Local is what is the government doing to buy more meats, produce and other foods grown or made in Nova Scotia? Well, that's probably not just a great question, it is probably the question I asked, I think, before we ever got to Select Nova Scotia. I think the government should buy local, when it makes sense, to support local producers while ensuring taxpayers' dollars are used wisely and for the maximum possible benefit. This is a very important issue to me.

 

We understand many agriculture stakeholders would like more locally produced foods to be used in public institutions like schools and hospitals. I asked my staff to conduct a survey of food procurement in all publically funded institutions and report back to me. They presented some of the results earlier this month at a public forum attended by food producers, wholesalers, distributors, and food service managers. What we learned is every part of the market chain has different expectations, issues and opportunities when it comes to food procurement. I was particularly interested in the issues faced by our suppliers in their efforts to get more local product in institutions such as hospitals and homes for special care. The school system already has specific needs and I'm keen to know how we can get more local, healthy food in the hands of our children.

 

Developing connections throughout the supply chain is vital to business success. Through the strategic policy direction and collaborative business relationships, some opportunities for purchasing local food can be achieved. I know this is not a simple issue with an easy solution, but we'll keep working with industry on this important issue. We need to be strategic and we need to think long term.

 

Since October, the Agri-Commodity Management Association has been coordinating programs and looking for joint ventures in the red meat sector. For members who may not know, the Agri-Commodity Management Association - just to save you from using up a question when you get to it - we've put together this association, or helped in the formation of this association, because it took, basically, the remnants of Pork Nova Scotia and combined it with sheep producers and beef producers to have an organization that would help promote that red meat sector. That's what the Agri-Commodity Management Association is.

 

We've committed $300,000 over three years to help our industries be more competitive, with the expectation that after those three years are up the organization will sustain itself. I want to give an example of something quite new that we're investing in now and that is grass-fed beef. As a naturally healthy food, grass-fed beef presents a significant opportunity to rejuvenate the beef industry in this province. The Department of Agriculture is working with Nova Scotia Cattle Producers, researchers at the Nova Scotia Agricultural College, and AgraPoint production specialists to best identify best practices for grazing cattle on pasture.

 

The adequate rainfall and a warm growing season make Nova Scotia the ideal place for growing grass - cattle producers here need to capitalize on this advantage. The Cape John Pasture Project will help producers by demonstrating the best practices for a rotational grazing management system. This pasture management system has been shown to improve pasture quality in yield, as well as improve cattle health and productivity. It will be introduced to Cape John Pasture this Spring.

 

The purpose of this initiative is to determine the best practices for intensive pasture management in Nova Scotia to get the most of our natural resources. The Cape John Pasture Project will utilize applied research methods to capture the full potential of Nova Scotia's pasture system for grazing and finishing cattle; it will also be utilized for extension purposes, as well as act as a permanent operating system for the pasture. The point being in that project - and sometimes I might talk about grazing or feeding cattle, but our intent is to finish cattle on grass; that's really where we want to go. We're trying to step away from grain-finished beef, which is a western model. We can't compete with the West for the cost of grain. We basically ship grain to the East, and those transportation costs have really been difficult to get back out of the value chain.

 

It's difficult to understand or to know what the real world of the beef industry is because the BSC has thrown the whole market structure - I can't say out the window, but you can't depend on normal variables in the market. It appears that even with shortages of cattle, prices stay low here - and we're seeing a little bit of a rebound now in that, but to produce commodity beef to sell to the retailers is really a difficult place for our producers to go and compete with grain-finished beef in the West.

 

What we did is we took 120 acres at the Cape John pasture, divided it into six 20-acre paddocks, and we're going to rotate those - and I did have the number of head of cattle that we're going to have in that study, but I can get that if somebody wants it - over the summer season and do rate-gain tests and see how these animals finish. There is a lot of research going on and actually one component of this, and I think some of the members might want to think about, is the issue around the quality of the forage that you feed the cattle. If it appears that we can get significant gains and get cattle to finish - well, I guess we know we can make them gain - the question is whether they will finish well enough and, if that's possible, cattle producers here will have to learn to do two things really well. They'll have to learn to breed the right cattle and they'll have to learn to grow forages - they'll have to be as good at growing grass as they are at genetics around beef.

 

That brings me to my next topic. Cattle producers also want to improve genetics as part of rebuilding their herds. Prince Edward Island and New Brunswick already have heifer and bull genetic support programs in place that are working well. These are pre-tested models that we should follow.

 

April 2^nd was the Nappan Bull Sale and so we announced our Genetic Enhancement Program to subsidize the price of a bull - and there are criteria, which I don't have at my fingertips right now, but issues around rate of gain and so on. Also, there is a Heifer Retention Program - I think the heifers have to be pregnant heifers in order to get the bonus. And there is another component of this that you have to have 20 head of cattle in order to qualify, so if you had two cows and you wanted to go to Nappan and buy a bull, we're not paying for it; we're not subsidizing that.

 

The only place, I think, where we might consider, we did put in a little more money for young farmers, for new entrants. If somebody is trying to get started, we wanted to give a little more emphasis to them, so for new entrants there are actually more dollars available. I think the maximum any producer could get is $3,800, somewhere in that range.

 

We also have developed sheep and goat genetics enhancement programs as well.

 

All of these programs, we work closely with producers organizations to address - to have a program that would address their needs. I think the cattle producers wanted our program to be similar to the one in New Brunswick, and I think we're of the view that ours is actually just slightly better. That's not to say that program is etched in stone; I think that as we move further down the road on our experiments around grass- finished and so on, we may want to tweak what we deem to be necessary, in our Genetic Enhancement Program, to shift our cattle toward those that seem to do better in that regard. There is still an avenue for some feedback, and we'll learn a little bit from what producers think about that program, but we do want it to be something that is - if this time next year we decided to adjust it, we want to have that option.

 

One of the fastest-growing agriculture industries in Nova Scotia is mink, worth $100 million. I have to say, if you have questions, there is probably no one on my staff who knows more about what is going on with mink than Leo Muise; he is close to the producers in this regard. This is a very strong industry and it is entirely export based. It brings new wealth into the province. It has been a bit of a back and forth, but I'm thinking that last year's pelt prices - I'll say the pelts from last year's kits, or whatever the young are ; I think I got the right word, but I might be wrong - there's a very good possibility that the mink industry's farm gate sales may have surpassed the dairy industry in farm gate sales this year or the year past. It's just an incredible industry in this province.

Our government passed the Fur Industry Act last May to regulate the industry and put standards in place. This is a comprehensive Act that addresses prevention by requiring systems and structures to avert contamination of water and air. Regulations are currently being developed by a committee of technical experts representing the Department of Agriculture, the Department of Natural Resources, and the Department of Environment, and I expect to have them ready in the coming months. The direction to my staff was to have those ready this Spring and I think they're going to hit that mark. They've been working really hard at getting these regulations in place.

 

I think for any members who have been paying attention to environmental issues in the southern end of the province, some people are blaming it on the mink industry. If that is the case, this is to prevent that and to allay the concerns of the community and to allay the concerns of the mink producers as well. They've been excellent to work with on this initiative and so I think we've been really pleased that we've been able to make such gains so fast. Hopefully, very soon we'll have those regulations. We made a commitment that we would allow the stakeholders to have some input into those regulations. I'm not quite sure if we're there yet, but we should soon be, and to let them actually see them and have some input into what we've come up with.

 

Beginning in January 2010 the department took over responsibility for enforcing farm animal welfare laws in our province. The SPCA continues to look after domestic animals like cats and dogs. By splitting the duties, the new legislation passed in 2009 shifts the burden for looking after farm animals and horses from the SPCA to the province. The money saved by the SPCA is now being used to protect domestic animals and fund other programs run by the SPCA.

 

The year was a busy one for the veterinarian in charge of the farm animal welfare program. The department addressed all 159 complaints it received - three of those complaints resulted in an investigation and charges being laid. The majority of calls from concerned citizens were about lack of shelter during extreme weather or the body condition of the animals. If anyone is not clear what body condition means, it would certainly be if you were driving by and see an animal that you probably would just say seems too thin, if you can count the ribs, those are the things that tend to spur interest by citizens when they see an animal and they worry about it. It doesn't always mean neglect, but that's usually the first thing that makes people question, is there a problem there?

 

I'm very proud of this program and the success we've had so far. We recently added a second investigator to work under the province's veterinarian and we will be better able to serve the needs of the farming community and farm animals throughout the province.

 

Our horticulture industries continue to produce a range of great products. This includes some of the products we are most known for in Nova Scotia, but also some increasingly unique and value-added products. I am thinking about how decorated Nova Scotia wineries have become over the last couple of years, taking home multiple bronze, silver, gold and double gold awards from national and international competitions.

 

Our apple industry has introduced very popular varieties in recent years, such as the honeycrisp, and is getting set to introduce another. The point I'm making with these examples is that we are recognizing what our competitive advantages are and producers have seized those advantages and this is the way we need to do business.

 

I'm going to pre-empt my introduction into the Homegrown Success, our 10-year vision, but I'm sure that at one point in time, when someone talked about a wine industry in Nova Scotia, perhaps people thought that was just a pointless notion, but for the sake of an idea and some resources - and that doesn't mean that the early days of that went well, but Nova Scotia is recognized as a place that can produce good quality wine. I think when it comes to innovation, research, entrepreneurship, this is what we hope Homegrown Success will encourage. It doesn't have to necessarily come out of the traditional farming community. There is a lot of what we've taken now that we would regard as starting a tradition has come completely from strangers who came here from somewhere else, but they brought new ideas, great ideas, some expertise, and have made the province a better place for it.

 

I know you're now familiar with Homegrown Success and I'm thinking that my colleagues - certainly the critics for the Opposition - I hope have read it. I got some questions in Question Period, so I know you read enough to ask questions. Anyway, I'll be more than glad to hear your views on that document. I launched Homegrown Success at the Nova Scotia Federation of Agriculture Annual General Meeting this past November. Homegrown Success is the result of an extensive analysis by senior staff to identify the means by which government can best support industry growth, sustainability, and long-term profitability. It's about helping agri-businesses seize their competitive advantage. Homegrown Success articulates our vision for a successful agri-products industry in Nova Scotia. It is a guide for policy programming, research, and innovation. It aligns with jobsHere, the government's plan to create new, good jobs in Nova Scotia. Staff are currently developing a five-year business plan to implement Homegrown Success and this plan will guide its implementation.

 

Our budget now is $500,000 for strategic initiatives related to our 10-year plan for agriculture, and Homegrown Success will frame what we do as a department. As I mentioned, Homegrown Success will focus on innovation, it will help us become more sustainable and market new products. Our government understands the importance of research, innovation and partnerships in the long-term prosperity of agriculture, job creation and the economy of rural Nova Scotia. Not only do we understand the importance, but this government has acted upon the understanding with an investment of $5 million for the Atlantic Centre for Agricultural Innovation.

 

In addition, our government is kick-starting the operational component of the Atlantic Centre for Agricultural Innovation with a $480,000 contribution this fiscal year. The Atlantic Centre for Agricultural Innovation will help build on that established research capacity and translate it into new business opportunities, focusing on agri-food products. It will help producers evaluate, nurture and grow good ideas into successful businesses.

 

When we talk about these initiatives, sometimes people will have a hard job to grasp what this centre will do. There are a lot of things happening in agriculture that people deem as possible market advantages or opportunities. We know that there are more antioxidants or a lot of antioxidants left in the pulp of blueberries after you take the juice out of them - so the question is, what can you do with the pulp that provides opportunity for blueberry producers? These are the kinds of initiatives that a research facility like this could do.

 

I was told of someone who had developed a sunflower that had a natural insecticide, so here you have a possibility for an insecticide that is organic-based. Those are the kinds of things to determine, right from the ground to the store shelf, what is the possibility for a product like that? This is a centre that it's our intention would help with that.

 

We're not saying that if producers could grow sunflowers that could go into a processing plant that would produce sunflower oil that would act as a natural insecticide that they will get rich, but it could be a component of their farming operation. In other words, they might be doing other things but they still have capacity in their land to grow this and make some money on it that would help their cash flow and if that helps the bottom line, that's what we see the potential for.

 

Government is working on environmental research in the area of agriculture biofuels, a grass fuel-burning facility is being designed and integrated into the centre's buildings - one of the things we've heard over some period of time, and I have been a promoter of burning grass pellets, but we haven't been able to get a facility to put a furnace in to use them. I thought well, if we're building this facility, then maybe that's what we should be doing, we should put a furnace in that can burn grass pellets and at least we'll be the one that offers an opportunity for producers.

 

Now with that said, I don't think we want to be in the grass pellet business; in other words, if there's no entrepreneur out there who is going to put up a plant to make the pellets, then I think we're probably never going to have grass pellets in Nova Scotia. One of the hiccups was there was no facility set up to burn them so we thought if we do that, then that will provide an opportunity for someone to build the plant. Anyway, we're hoping that actually what we do will kick that off and allow an opportunity for some farmers to turn their hay into grass pellets.

 

There are issues. You can't haul hay more than 50 kilometres, they think, as far as transportation, if this idea was to take off, you would have to have several of them around the province to heat a facility in a community because you can't really make any money hauling hay from Yarmouth to Sydney. Fifty kilometres is about maximum and maybe now, with higher fuel prices, even that would be reduced. We do see this as having a lot of potential and we're really hoping that by us taking this initiative that somebody else will go to the next step.

 

I've had general conversations with the people who approached me, when I was in Opposition, and were promoting this idea and I've said, okay, we're going to put a facility in place, where are you guys? Are you going to take the next step? Government is investigating the placement of a pilot facility at the Nova Scotia Community College's Middleton Campus in concert with an alternative energy program there. That's another location where we've been hoping to do something.

 

While this work is in its infancy, we are optimistic about the possible outcomes. I mentioned the Atlantic Centre for Agricultural Innovation a moment ago. We know the Nova Scotia Agricultural College and other facilities throughout Atlantic Canada offer tremendous strengths in research and innovation. The Atlantic Centre for Agricultural Innovation will help build on that established research capacity and translate it into new business opportunities focusing on agri-food products. The centre will be a unique business model for North America. It will provide a meeting place where inventors and innovators can come together with entrepreneurs and business development professionals. It is how our producers, processors and agri-business owners evaluate, nurture and grow good ideas into successful businesses. It will bring together the resources to incubate new ideas, accelerate the commercialization process, attract near-market product opportunities and add value to products throughout the value chain.

 

I'm sure you've heard many times that the average age of farmers is nearing retirement. If we are to sustain agriculture in this province, we need to continue coming up with ways to attract new farmers to the industry through a variety of programs, including immigration. Last year, the Department of Agriculture invested $260,000 of Community Development Trust Funds in partnership with the Office of Immigration to encourage and help new people come to Nova Scotia to farm. We need to welcome these new farmers, not only because they're helping to keep agricultural land in production, but they're bringing fresh ideas and innovative thinking, traits essential to moving forward as an industry. We need to reverse the ever-increasing trend of our young people leaving farms and abandoning a future in agriculture.

 

To this end, we launched Think Farm, a program that includes tools to help farmers get started in business, information on agriculture programs and services, and what's needed to help ensure success. Think Farm helps attract new people to careers in agriculture and supports beginning and transitioning farmers working to develop and share information on the business of agriculture for people interested in starting or growing a farm or agri-business. Think Farm is helping beginning farmers with little or no background in agriculture and established farmers with years of experience. It is one more tool in the toolbox.

 

I believe matching people with rewarding careers and business opportunities in agriculture is an important part of keeping Nova Scotia's agriculture industry sustainable. We can assist established farmers change their farm business commodity, production method or marketing model. Through workshops and other forms of outreach, Think Farm is working with non-traditional groups in agriculture, including African Nova Scotians, First Nations and urban farmers, to promote agriculture as a rewarding career.

 

Young farmers are going to refuel our province's agriculture industry. We need to help young people entering farming as a career and make sure that they can stay in business. We have found that young farmers have a very innovative approach to farming and have built upon the knowledge of previous generations. I have faith that our young farmers will become the future leaders in our rural communities.

 

The 10-year plan for agriculture will help us get where we need to go, so we can be successful for many years to come. In response to the needs of farmers, we have increased the number of regional field support staff and realigned staff in regional offices throughout the province. I believe this new take on how the department delivers extension services to farmers on their farms will better serve the needs of farmers.

 

The Department of Agriculture continues to support the industry with improved programs and service delivery that reflects what is in the pages of Homegrown Success. Department programs and services are being realigned to better support the priorities and goals outlined in our agricultural strategy.

 

We have repositioned and profiled all funding and business risk management programs into theme areas. There were previously three funding structures - Agri-Food Industry Development Fund, Innovation Fund and Farm Investment Fund. Now, those program structures are positioned into four themes; business development, innovation, environmental, and quality assurance. This will align Homegrown Success and jobsHere plan to create good jobs and grow the economy. Producers will have the same opportunities to apply for funding and can apply for more targeted funding that reflects their needs, whether they are a primary producer or a secondary processor.

 

While the Farm Investment Fund will no longer continue as it has in previous years, funding under a new thematic area is coupled with $400,000 for the introduction of our Soil Amendment Program, a new Genetic Enhancement Program incentive of $500,000 and additional funding of $500,000 to support the 10-year plan for agriculture, there is a net gain of $400,000 to programs.

 

We need our programs to be more flexible so they align with federal agricultural objectives and outcomes and they support business development and competitiveness of agri-business.

 

A moment ago I mentioned the Soil Amendment Program. We are investing $400,000 of new money into a program that directly helps farmers. I promised this during our election campaign and I'm pleased to say that this program is now in place. I'm pleased this government has made good on its promise to help remove cost barriers so farmers can keep soils healthy and productive. The enhanced Soil Amendment Program will help cover the increasing costs of transporting substances like lime, wood ash and other eligible amendments directly to farms. We are aiming for a mid-May launch date for applications.

 

We are continuing to work on a renewed federal-provincial territorial agreement in the year ahead, to make sure Nova Scotia's priorities are addressed in the national Growing Forward programs. Our priorities are exactly what I've talked about today. Agriculture holds a prominent place in our province's culture and economy. It's a diverse industry that takes a whole value chain approach, focuses on markets, opportunities and a strong Nova Scotia brand, infused with innovation and with a strong culture of research and development. It's an industry recognized for the role it plays in our economy and the contribution it makes to our environmental sustainability and social well-being. It is an industry of choice for young people because it offers exciting opportunities and they know they can make money at it.

 

Thank you for the opportunity to speak to you and I'd be glad to take any questions.

 

MR. CHAIRMAN: Thank you very much, minister for very informative introductory remarks. The time is 10:25 a.m. and we will turn the time for questioning over to the Liberal caucus for one hour.

 

The honourable member for Kings West.

 

MR. LEO GLAVINE: Thank you, minister, for that overview, a very strong overview. I know this is an industry where you are very comfortable as you have a deep background with agriculture. That is a two-edged sword because it provides the knowledge but it uses up a chunk of time when we're here on estimates. That's one of the realities.

 

I wanted to take just a very quick look at the general picture of the overall funding for agriculture, taking a look at 2009-10 and what the estimate was and the forecast with the actuals. In 2010-11 we're looking at an estimate of $60 million to run the Department of Agriculture, to invest in agriculture and all of the associated programs. We're now forecasting around $64.5 million.

 

What is making up that amount from the estimate to the forecast? I mean, you've gone into about $4.5 million more. I wonder if you could give a sense of that?

 

MR. MACDONELL: Really, I think what we're looking at is about a $3 million or $3.5 million difference. I think it's about - are you looking at $60.879 million?

 

MR. GLAVINE: That's right.

 

MR. MACDONELL: To $64.533 million?

MR. GLAVINE: Yes.

 

MR. MACDONELL: That's about $3.5 million bump. The NSAC, there was about $2.2 million, pretty near $2.3 million additional funding went there. We had higher enrolment at the NSAC than expected and that actually meant more projects and more cost. That was a good thing, you know, we saw that as great.

 

There was some increased Farm Loan bad debt expense, about $500,000. There was an increase in marketing and development of $400,000. The other department increases offset by increased recoveries and fees toward the Growing Forward program, nearly $300,000 - $285,000 - and funding for the Agri-Tech deficit of $150,000. That should get you to the $3.654 million roughly.

 

MR. GLAVINE: Thank you. The estimate for this year is at $61.115 million so that is roughly $3 million less than what was put forward this year. In your opening remarks, you have shown where agriculture does have the potential to be a job generator; there is a lot of renewal and so forth going on. I know you're talking about the Back to Balance concept and so forth but when you're looking at an area that could use some investment to move it to some of the next, more productive, more efficient steps and to support great programs that are going on in our research in particular, whether in Kentville or Truro or the new Atlantic Centre for Agricultural Innovation you alluded to. Why wouldn't we be at least maintaining the current level if you're saying that the current year did have some additional requirements, ones that can be rationalized, then why wouldn't we stay at this particular level?

 

MR. MACDONELL: I think that for us, we compare estimate to estimate, so if you try to compare estimate to forecast or forecast to estimate, if we look at 2010-11 compared to 2011-12, our 2011-12 budget is actually up by about $250,000 in our estimate. Let me see if I interpret your question right. I think what you're saying is, well look, you estimated $60,879,000 last year, but you went up $3.5 million. We probably don't know yet because over $2.25 million of that $3.5 million was increased student enrolment at NSAC that really wasn't expected. We don't know, but we might get hit by a similar thing. We can't really book that.

 

Some of the other increased farm loan bad debt we might run into - most of these other expenses, there's an Agri-Tech deficit, some other recoveries, and it may turn out that we'll have increased spending. We don't necessarily look at - other than the student enrolment at the NSAC, which I see to be the positive expense there, the other ones are kind of bad debt expenses that we had to pick up. I don't necessarily see that kind of moved the industry forward so there may be something coming over the horizon that when you and I get to talk next year at this time, we'll say what the difference in these numbers are, but for what we can plan and predict in our budget - and I guess that's why we call it an estimate - but our estimated number is actually up by $.25 million this year over last so the budget is up rather than down.

 

MR. GLAVINE: That does explain and a lot of it is in positive regard when we're looking at the Nova Scotia Agricultural College. Along that same theme and drill down a little bit, on Page 3.3 under Programs and Services, Policy and Planning is estimated to go higher, even though the forecast for this year is lower than last year's estimate. Last year's estimate was $835,000 and the forecast for 2010-11 is $714,000 and yet you've estimated higher for next year. Can you tell me why the estimate from last year was quite a bit off the forecast?

 

MR. MACDONELL: Mr. Chairman, you're looking at the estimate for 2010-11, which is $835,000 and the forecast for 2010-11, which was $714,000. We had vacancies. I won't say we lost people, but people retired, so we didn't have as much expense as we had estimated and our estimate for 2011-12 is $871,000 is salary increases. Am I right, Weldon, on that? Yes. That's why we're estimating higher again, higher even than 2010-11.

 

MR. GLAVINE: Mr. Chairman, I was just picking at a few areas that seemed to not be as consistent because generally it's the department. If you could go back and you do a 10-year profile, it is very consistent in a whole number of areas.

 

On Page 3.5 under Programs and Services, the forecast for administration is higher than estimate, yet you've still estimated low for next year. I'm wondering about an explanation as to why this is the case.

 

MR. MACDONELL: So you're looking at the estimate in 2010-11 of $6.204 million?

 

MR. GLAVINE: Yes.

 

MR. MACDONELL: Up to $7.271 million?

 

MR. GLAVINE: That's right.

 

MR. MACDONELL: If you look at those two line items there where we went from $2.2 million to $2.6 million, about $400,000 difference in the second line item, Marketing Services?

 

MR. GLAVINE: Yes.

 

MR. MACDONELL: Most of that has gone to Cape John Pasture Production Project and the commodity agency where we put pork, beef and sheep together. Those dollars are there. Then on the Nova Scotia Farm Loan Board, you have about $500,000 difference there and that's bad debt.

 

MR. GLAVINE: I guess then perhaps you've answered that on terms of Farm Loan Board, which again, there is a fair discrepancy between. Thank you.

Just going back to Page 3.4 under Programs and Services, Programs and Risk Management, this is where the important Farm Investment Fund falls, if I'm not mistaken. There's been much anxiety, as you know, among the farming community about cuts coming to this vital program. It's one that I've heard from a number of farmers in the Annapolis Valley after some initial meetings with the Minister of Finance and the Federation of Agriculture, that there would be cuts here. We also heard about the New Entrant Program and that cuts would be made here. Can you explain if cuts were made to this funding initiative?

MR. MACDONELL: Some of these dollars are connected to federal-provincial so it's not all provincial. While the Farm Investment Fund will no longer continue as it has in previous years - I'm taking this from my speech - funding under new thematic areas, coupled with $400,000 for the introduction of our Soil Amendment Program, and a new Genetic Enhancement Program and additional funding of $500,000 to support the 10-year agricultural plan, we actually have a net gain of $400,000 in what was, what you might want to refer to as programs, and part of that is the Farm Investment Fund.

 

I think on the line item we're going to see a drop there of $149,000 roughly. I think even program funding may have seen a drop of about $170,000 but was picked up by $21,000 in additional salaries. Basically that program - actually we put more money into programs and that particular program might have seen a $149,000 drop in program funding over $10 million but there were some other additional funding in programs that are not business risk management.

 

MR. GLAVINE: In essence then, can we say that the nature of the Farm Investment Program is exactly as it has been, but moved to some other different program offerings? Can we say that what was covered and what farmers can say that from year to year when they made some of their investments, that much of that will still be available to them? I'm not going to bring here today the full story line from a few of the farmers who said, look, five years ago I did this and they tracked their Farm Investment Funds that they did receive and they've shown how it has been an enabling. It's not a big amount of money, as we know, per farm, but they clearly demonstrated how it enabled them to make those improvements, which are making their farm more viable now. I'm wondering, do you feel satisfied that where you're going now under some little different programs and structure, that the same accomplishment will be in place?

 

MR. MACDONELL: Well, I want to make it clear because the Farm Investment Fund took a bit of a hit last year, but it hasn't this year. We didn't reduce that overall funding envelope in this year. What we are doing is taking, I guess, those three programs that we had and one included the Farm Investment Fund and we're going to recreate those into four themes. Actually, if we look at the dollars available to farmers - because the Farm Investment Fund was only one of those three programs - we actually have more program dollars available to farmers than we did last year.

 

One of the glitches I hear about, from farmers on the Farm Investment Fund is that a lot of those projects were two-year projects. So there is a big component, the largest component of the Farm Investment Fund, or the remnants of the Farm Investment Fund, that actually is money that is already booked because of projects they booked last year. So they had projects booked for funding in 2010-11, which continued into 2011-12. Some people may think this year, I'm going to apply for that part of the program, will find that those dollars are already used up because the people who got the money last year are in their second year of the program.

 

I think maybe one of the more odd things is I think there are maybe people who enrolled in the program last year and got accepted for funding for two years and are thinking they can apply again this year and almost get a double-up of the 2011-12 funding, which strikes us as odd. Sometime if you hear there's not as much money in the fund, it's because a big share of that money has been allocated for two years rather than just one. If it was one year, they would reapply the next year, but the second year money is already allocated and so there's not that much opportunity for other people to apply this year. When those two-year projects are done, I would say well next year they should be good to go. The only problem is, they'll have to apply under either an environmental program or a business program. It may not just be called the Farm Investment Fund anymore; they'll apply to one of those themes.

 

MR. GLAVINE: I'd like to just drill down a little bit further. I understand at this stage that the drainage assistance has been eliminated. I'm wondering if you can confirm this and if so, why was this important section of the Farm Investment Fund cut in the budget? That's at least what we are hearing to date and I'm wondering if you can confirm that.

 

MR. MACDONELL: There is drainage money that's in a second year, so people are going to be doing those projects and getting allocations for those projects. That is kind of the same argument or case I tried to make earlier, it was a two-year project.

 

Since there's only so much money in that section, then once it's all allocated, it's allocated. So that would mean it would be the next year, if those two-year projects wind down, because nobody is going to be applying this year because all the money is allocated, they can't get 2011-12 money. Only the people who actually got approved last year will get their second year of that allocation. So there is going to be money for drainage going out this year but anybody who wasn't approved, and all the funds are allocated, they are not going to be able to get any money this year.

 

MR. GLAVINE: So then, just to wrap up this area and this line of questioning here, how do you envision the Farm Investment Fund inside the 10-year agricultural plan because it does seem like it is undergoing some change, some rationalization, as to where the best area of investment may lead us. I know this is where a few of the county federations have sent off an e-mail wondering where we could be going because if you're talking about a 10-year plan, then I know that it has a lot of fluidity about it, but there also needs to be some level of assurance around programs like that, that have been in place.

 

MR. MACDONELL: Yes, well the programming that we had - and I guess I hear more about the Farm Investment Fund maybe than I do about any other one - you're going to see the name of the Farm Investment Fund disappear, but the fund isn't going to disappear, the name is going to disappear.

 

What we've decided to do, because we would have - I'm trying to think about, maybe we would have people from our marketing branch who are pursuing initiatives with farmers and they would tell them, well you would qualify for something under the Farm Investment Fund. Then we'd have somebody from some other branch saying, well maybe you should apply to the Farm Investment Fund. What we found was that depending on what the initiative was at a particular branch in our department was trying to move a producer to, that everybody seemed to go to a different aspect of the Farm Investment Fund. What we thought would be more sensible would be to really break down the fund into its themes and you apply to the theme. You could maybe apply to Business Development, you may apply to environmental. You may apply to quality assurance or innovation.

 

It's our hope, because we know the funding in this year didn't drop and it would be our hope that next year - you can kind of tell by the numbers as estimates - that we'll be in the same place. What we're trying to do is put as much money into programs as we can. I've indicated some programming that we've enhanced and new programs, the Genetic Enhancement Program, what we'll do is people will not be applying to the Farm Investment Fund anymore, they'll be applying to business development or environmental or whatever. Whatever component - I'm not sure what drainage will turn out to be, whether it be environmental or what.

 

I guess we've had only initial contact with the federation so I think their big concern was that the funding was still there. It's our hope that next week we can show them, here's what this is going to look like. That may allay some of the concerns and reduce the phone calls you're getting.

 

MR. GLAVINE: I'm pleased that it will be ongoing and that you will relay to the federation what some of this will look like, that's very good.

 

In terms of the 10-year plan for agriculture, I'm wondering, in developing the document, and I think we all agree that the anticipation and the expectation was that there would be more specifics. I realize and know that we're in a great period of change and transition in agriculture and we only need to look at a few sectors, the hog and beef as great examples of those. I'm just wondering about the consulting process and you know we have leaders in the sectors and so on, who are available to the minister. I know a number of these people and the kind of expertise and practicality that they bring to the table, the knowledge that they offer each time you're asked to deal with something of this nature. I'm wondering, in terms of the producers and stakeholders, what kind of consultation went on in developing the 10-year plan and keeping them engaged as we move through that 10- year plan?

 

MR. MACDONELL: I think the engagement piece is something that we continue to do on an ongoing basis. What I just mentioned about next week, this program reorganization, we'll take that to the federation when we have that spelled out so I'm hoping that next week we can do that with them to get some feedback from them. We stay in quite close contact, certainly, with the president, I meet with her on a regular basis, or I try to, then there are engagements with the council leaders. To get specific to the point about the Homegrown Success and the 10-year strategy, prior to my becoming minister, and you may remember as well as Opposition Critic at the time, there was an ongoing committee between the federation and the department on competitive transition. Do you remember that?

 

They came out with a report but nothing much was done with that report. So we used that report as the basis of the consultation with the industry because it had gone on for months. Actually I'm thinking maybe a year or more but anyway, it was a regular meeting session. I'm not sure if they met once a week or once a month, or whatever. This was an ongoing commitment by the previous administration but there really wasn't anything done with the report once it was written. I can't say - certainly because we were a new government and had our own issues that we actually wanted to see fit into the 10-year strategy but, around a fairly comprehensive engagement process with the agriculture community, through the federation and the competitive transition committee, there had been a lot of work that just never was used and that formed the basis of the consultations that we used in that 10-year plan.

 

MR. GLAVINE: In some ways I saw the document as a series of guiding principles, perhaps a lot more around an internal plan within the department and not as strong, in terms of a strategy, to ensure farmers are getting the calculated funding, the assistance and so on, they require. I'm just wondering why we didn't set out goals, for example, around locally produced food, increasing and improving the procurement of what we produce in the province, those kinds of areas. If you could make a reference to that please.

 

MR. MACDONELL: I think the reason we didn't do that was because we weren't sure we could do that. I think that I have to agree with you, partly, on the idea that I would have loved to have been able to write the plan and say in 2013 we'll have X number of new farmers, we'll have increased our Buy Local component in our major retail stores up to 50 per cent or to hit real numbers. The only problem with that, because we can't legislate Buy Local, is there are other factors that prohibit. We could say, not only are we going to have X-number of new farmers, but we're going to have X-farmers in this particular area. We're going to have 15 new hog farmers, let's say, if we were to take that route. We couldn't guarantee there were 15 people who wanted to go into hog farming.

 

The question of what your incentive might be is that you would have to bankroll them to such a point of incentive, in order to hit your target, and we didn't necessarily see that as a sustainable way to move the industry forward. I think what we saw as the best thing we could do for the industry was maintain our pressure and education of the public on the Buy Local so that the customer is asking for it, because it's working. I've got to tell you, this initiative has legs. The department did some recent polling and found - you may not believe this - 33 per cent of the respondents recognize Select Nova Scotia and the Buy Local campaign.

 

If politicians could get that kind of a response from any initiatives that they were doing - we thought, let's put our money into research and development. If you think about Case Van Dyk and his blueberry juice, a fair bit of provincial money has gone into help moving - and it wasn't all from us, there was ACOA. There was taking a raw primary product and enhancing the value-add side and production techniques so that people are calling from Brazil. That's not without a single individual having a very good idea and looking for help.

 

It's pretty hard for government to say, well, we want someone to produce blueberry juice. It's a lot better for us if somebody who wants to produce blueberry juice comes to us and we have the mechanisms in place to help move him along. That's why we see the value in investing in the ACAI Centre so that we have a capacity to do research that producers can use and actually, hopefully, means that if we have three today that we'll have 10 tomorrow.

 

I think to make targets and to hit them, there were just so many variables that we could not control and then people automatically would say, you can't do this. I mean, they would shoot your strategy, but to say, we're going to invest in innovation and research and the things that producers actually can't fund for themselves to help move their industry forward, and then hopefully people who at some point - as much as we'll hear about food security and so on, this won't be a charity case. People will need to make money in doing that and that's what all of this is about is entrepreneurs who are farmers. We just need a template that allows us to help them move their industry forward and I think we couldn't have guaranteed control of all the variables that you would need to control in order to hit those targets and that's why we didn't make any.

 

MR. GLAVINE: Mr. Chairman, on Page 16 of the Homegrown Success plan - and I know you're very familiar with it so you don't need to take a look - under Objectives and Outcomes there are three strategic objectives; the going forward, the environmental stewardship, social well-being. I know you've referenced some of that in your last answer here. Can you develop a little bit more in terms of how those will work over the next 10 years to reviving agriculture? You know as well as anybody, and in looking at the broad view of agriculture from Boularderie to Yarmouth and South Shore to Amherst that each census year the number of farms goes down, the farm-gate income is lower, farm debt is at an all- time high.

 

How do you see, without a lot of detail, how they're going to work at reviving the industry?

 

MR. MACDONELL: A lot of what you would term environmental or social is more questions around hurdles that the industry faces. I don't see them as necessarily creating a windfall that's going to produce 20 or 30 new people to go into agriculture. What we hope is our program - I think we can think about the issues we have around mink production right now as far as environmental. It's the actual ability to make a profit that's encouraging mink farmers to go into mink.

 

Our responsibility as a regulator, or I should say Department of Environment as a regulator, is to ensure this is done in a way that doesn't harm the environment. As much as we can have programs in place, we do manure storage and whatever, actually the biggest draw on the Farm Investment Fund is the dairy industry. They take about half of the Farm Investment Fund.

 

In terms of doing things environmentally sustainably that's issue number one. The other part of that - and it probably bridges over to the social side as well - it's also that encouragement around promoting good, healthy food, as much as we can produce more toward organic. I think these all provide market opportunities and I think a little bit more on the social side is really around the buy local initiative. There are people who are actually finding, because they're small and can deliver to a local market, they actually have a toehold that they wouldn't have trying to supply a large retailer. I think all of that together will help grow the industry.

 

MR. GLAVINE: That maybe is a good place to depart a bit from the general picture and with Mr. Muise at your side there, we can look for a few moments at the mink industry. I understand the regulations are being put in place and I'm wondering at this stage of that development, I know we can have meetings, I know there can be real consultation. There is a difference. I'm wondering if you've had actual consultations with the mink producers and a growing environmental concern group, especially in the western part of the province.

 

I say that knowing the vast majority of mink farmers are doing an excellent job around self-contained operations. They are responsible for the liquids and solids and have a good plan already in place and they're some great models to take a look at, some near where I live in Kings County.

 

That being said, I'm wondering if you've had that degree of consultation where we know these regulations, when they do come in, are going to hit the needs to make sure that industry has very good sustainable practices for the future and any association, in terms of environmental delegation, will also be met with.

 

MR. MACDONELL: I think Mike Chisholm from my department was there and met some people but I'm not considering that the kind of level of engagement that I am expecting, so I'll let Leo correct me when I give this answer. My view, and what we have always have said from the start, was that we would draft regulations because they're quite technical. We were going to need people from our staff in Agriculture. We were going to need people from Environment and we were going to need, I think I might be wrong, but I think people from Justice.

 

My department, actually, had indicated they thought that we might be three years out before we had those regulations ready and I said we're going to have them next spring. It really put a burden of commitment on them. They had to come up to the challenge and they have, they've been great about it. Because this was a complicated and a time consuming issue for them working in the department, I didn't want them going to south western Nova Scotia once a month to engage, to consult, because I think that they would never get anything done. So what I said to them was we'll draft it, because we have the capability to draft it, and then take it out to them to have a look. I think one group actually has a lawyer as their spokes person, who I think, from what I hear, is very capable. I'm not just saying that because she's a lawyer and we would think she would be capable, but I've heard through my circle that this is a very capable individual who would be very good to represent this group.

 

We thought that we could probably gain more in time by drafting the regulations, having them see them, give us some input into the draft and then if we needed or thought that there should be some adjustment that we could accommodate, if something didn't seem to be clear enough or going far enough or whatever. This has to be a very professional endeavour, the same as any regulation you would expect from government and so I think in that regard I did make a commitment. I went down during the by-election in the Yarmouth area and I was of the view that I was going down during the election to convince people that they could have input, if they wanted to have input, into the regulations. I think I stood for two and half hours at the front of a room of people who, by and large, related the history of many, some years before I was ever minister.

 

Several times during the evening I would say, well I'm really just here to say are you interested in participating and that we're open to that. So I made that commitment to them and I'm going to stick by it. They may not think that they've had enough consultation but I just find that the regulations are so technical that that's not something that an open form like that can deliver for you. The issues around making the environment as pristine as you possibly can and still have farming operations, whether they're mink or cattle or whatever, are important to all the citizens, and certainly important to the mink producers and the citizens down there who are not.

 

As far as a continual open engagement, it wasn't the route that I wanted to go, but I am certainly hoping that at some point very soon when the drafts of those regulations are ready, I'd be more than happy to have our staff take them to them and sit down with them. Even if that means more than one meeting.

 

The deputy minister tells me that we've had two conversations in the last week with the group leader about coming soon to do that.

MR. GLAVINE: I'm pleased to hear that because I know that there's also great concern within the industry that everything is done right in this regard around the environment. Because there are a lot of examples in Europe and other parts of the world where the reaction, of course, has impacted the industry tremendously. I don't want to see those kinds of developments migrate to here because the industry can be done in the right way and the majority are doing that already.

 

I'm pleased to hear that you have stepped up the timeline when these will be in place and hopefully, there won't be this grandfathering, I think there's a need for action on a couple of fronts immediately and hopefully that will be the case.

 

MR. MACDONELL: In the legislation, once the province drafted its regulations, then the farmers would have three years to comply to bring their facility up to the standard. You can understand what I thought was my conundrum, if we were going to take three years to draft the regs and then they had three years to comply, I just thought that was a non-starter. We could not allow that time frame, considering the angst in the community around this. I might be wrong but I don't think there's any grandfathering. You'll have three years to comply and that's it.

 

Now I don't - I'm sure, like all things, we all realize there probably will be somebody who will leave it to the last minute. But why that would be the case, they really - as soon as they know what the guidelines are or what the regs indicate they have to do, then I would expect that the majority of them would be trying to get that done very quickly.

 

MR. GLAVINE: I think perhaps there will be an opportunity as we go through the session to perhaps ask the minister a question and get something further on the record, as I say, as we go through this session. I'm pleased to hear that and we know from the point of view of the economic benefits to the province, this is an industry that, in fact, puts some new and real dollars into the Nova Scotia economy but we know we have to be vigilant on a number of fronts.

 

One of the areas you touched upon was the pilot project, the Cape John pasture and looking at hopefully what will be a better day for the beef industry. I arrived here in 2003, the BSE crisis was at its height in the Fall and we had demonstrations here at Province House, we had tremendous anxiety in the industry about how it was going to survive this. We know the national programs didn't do very much to meet the need of farmers. They just did not address the Atlantic Canadian mixed farm and many have had difficulty recovering. Some didn't recover, there were casualties of the BSE in this province, who are either no longer farming or in a reduced capacity for it.

 

In terms of this pilot, are these beef animals owned by individual farmers? Is this in conjunction with people already in the industry or is it a very separate endeavour? I'm just wondering if you could put some more specifics to it, because we already know that some farmers have tried to move in this direction - as you developed the beef strategy over the last number of years, great consultations and so forth did go on. I'm just wondering if you could lay that out with a little more detail.

 

MR. CHAIRMAN: Minister, before responding, just a comment in relation to time. There are 10 minutes remaining in the Liberal caucus time for this round.

 

MR. MACDONELL: Thank you, Mr. Chairman. I'm going to add a comment on the mink before I forget. The member for Kings West was just informing me that since we have half of the mink production in the country, the national organization is looking at what we're doing because it's going to be precedent-setting and so they're very interested in what we do here in Nova Scotia.

 

On the cattle side, the cattle are not ours. They'll be producers' cattle that we're using in this project. We did buy six animals, we own six head. I don't think they're branded Nova Scotia Department of Agriculture yet, but we bought six head for a cut-out trial that we wanted to finish - unless I'm wrong on this, but I think I'm right. We were feeding them grass silage to see how they would finish on grass. I'm thinking they won't get out to pasture, that we'll have those caught and we wanted to cut out those carcasses to get what percent of meat and how they finish and do a little research on if it's possible to gain some efficiencies.

 

Tony's Meats hired a butcher from Great Britain to come over to break down a lamb carcass and he got 10 per cent more value out of the carcass by breaking it down in a slightly different way than we traditionally do here. So if you can get 10 per cent out of the same animal - that's kind of the direction we're curious about, how we can maximize the breakout on the carcass. I can maybe give the members - because I'm going on the idea that I'm right, that these animals may not get out to pasture, that we'll have them killed before.

 

As far as the other parts of the Cape John study, those are Nova Scotia producers and I think that's generally who make use of the Cape John pasture anyway. The Cape John pasture is bigger than the 120 acres that we're talking about so we're just fencing off 120 acres into six 20-acre paddocks and using that for our research. Somebody made a comment at the cattlemen's meeting a couple of weeks ago when I was there that they had heard that there were going to be PEI cattle in our study - absolutely not the case. There might be PEI cattle in the Cape John pasture, but they have to pay to use the pasture the same as they would any other year, but they won't be part of our study area.

 

I'm not sure if I answered every question you just asked me.

 

MR. GLAVINE: I think the two central pieces that I was wanting to know was where the cattle have come from in terms of ownership and the process that you will go through there. I consider this small in nature. Hopefully it's going to get input from other beef producers that already have embarked on their own to do this kind of really necessary work. We know that finishing grain-fed cattle is very challenging in this province. It pretty well reduces profit margins to very little. In that regard, however, in looking at grains as part of the component of beef farming in the province, I do consider this to be an important aspect of the beef industry. As you know minister, we can grow a head of cattle in pretty well every county of this province and when you take a look at the amount of farm land no longer in use, to have success here and to have profitability could in fact be a wonderful step to some revival of the beef industry.

 

With that being said, I'm wondering if there is some hope for increasing the production of grain in the province. Is there still some hope to embark on producing grain in this province that would reduce costs to any of the sectors that require grain, whether it's our poultry, our turkey, our egg producers, any of those? Do we still need a lot of work in this area; do we have some success stories? I know we've had some stops and starts in terms of grain operations and the drying of the grain and so forth.

 

MR. MACDONELL: I have to be honest and say my experience with growing grain is very limited. I have done it. There are parts of the province, actually - and you live in one of them - where the ability to get on the land early and to be able to get on the land late in Fall - if you needed to, you can generally do it in those valley soils, which are well drained. Generally one of the issues in Nova Scotia is the ability to get on early enough to get your crop in - the earlier you get on the earlier you can get it off - but if you get into heavier clays it might be a little more of an issue. The areas that I'm thinking where there may be the most potential to grow grain would be in the organic side because you need organic feed to grow organic whatever.

 

The commodity of chicken, turkey and egg industry - because of their ability to get their cost of production out of the marketplace, they probably can pick up those costs because really a chicken is just a two legged pig. If you think about the hog industry, all their feed was western grain - not entirely but by and large - because I think some producers did try to grow some of their own grain, but because of their inability to get their cost out of the marketplace, it killed them. Here we have umpteen thousand kilograms of chicken every year, with a grain supply generally coming from the west, and yet they are making money and they are passing that cost onto the consumer and covering those costs.

 

The present increase in the price of oil, globally, is going to impact transportation costs and that is not just for grain that's for moving food from California or whatever. That is actually one of the points that was raised to me by one of the executives at Sobeys - he indicated that it is their desire to buy local. A major component of that was their transportation cost of bringing the food from somewhere else and he said, as oil prices go up, we are going to look more and more for local. The comparative issue with that is it's going to cost more to produce the food because your fuel costs are going to go up for the producer here.

 

I would say if you were to look at the supply manage producers in the Valley, - which you had indicated, the chicken and egg guys - I don't think that they are growing large amounts of grain. I might be wrong on that, but they would be ones who, I would think - if it was obvious that they could benefit from it, they would. They seem to have the good soil types to do that. If they are of the view that they still import grain and make money that would probably be your best indicator as to whether or not it's worth doing.

 

I have a friend in Prince Edward Island who told me - and I think they may have a subsidized program on grain - he said there was only one year in five where it would have paid him to grow grain. I think on PEI, they alternate between potatoes and grain generally, but they have to do a rotation and grain is usually the second part of that. There's a fair bit of relatively cheap grain in PEI generally because of the volumes, but I don't know that anybody is getting rich in producing it.

 

Trying to get your price out of the marketplace for the grain you produce and that just may change just because of market stresses that people will pay more for grain. Right now, we don't have any initiative other than whatever programs we have if you want to try to grow something and you try to market it yourself, but we're not subsidizing people's costs on growing grain. I guess that's kind of the long answer to a short question.

 

MR. CHAIRMAN: I had signalled to the member that there might be time for one more question, but the last answer was somewhat lengthy so at this time we will turn to the Progressive Conservative caucus for one hour. The start time is 11:25 a.m.

 

The honourable member for Hants West.

 

MR. CHUCK PORTER: Thank you for being here today. It's good to have an opportunity to ask a few questions. I want to jump right in. I've got a number of things that I want to cover and we don't have a whole lot of time today, but we'll go from grain. I just want to mention though, the comment about the two-legged pig is probably the first I've ever heard referred to as a chicken. Perhaps they eat considerably less as well than the four-legged breed, but anyway, interesting.

 

The grass pellets you talked about early on this morning in your opening comments, did we not have - I can't remember the farmer's name - somebody in the province in Hants County? I know he has been at our meetings that we've attended, (Interruption) Norbert, who has been working on the development of this very thing. If I recall, at one of the annual meetings he spoke and gave a presentation; I think you may have been there. There was a bit of an issue there with clinkers or not quite refined enough. I know you're talking about it and the potential for an investment, which I think is good. It's a great way, it's a natural thing growing right here. It's a good potential for an energy source. What kind of investment are we looking at here by way of this and knowing that there are still some issues, are we looking at the refining piece of it to get it so it does work? Is that where you're going with this, looking for an interested entrepreneur to go there?

 

MR. MACDONELL: Actually, we were really looking at just retro-fitting the ACAI Centre when we get it built so that it has a furnace that would burn grass pellets. Actually, we're probably going to have to have a furnace that burns wood pellets or grass pellets or both. Gus Swanson in Pictou is a big promoter of this idea and one of the issues was the silica deposit out of the grass, which forms a clinker. It strikes you to be kind of similar - I took the basic farrier course at the Agricultural College and I shoe my own horses. I don't do a lot of forge work, but when I do it, I do know about clinkers in coal out of the forge. These are kind of similar and you get kind of a ball of material that stays in the fire box and doesn't leave the fire box so you need some kind of system in order for it to go with your ash.

 

What Gus Swanson did was create a mechanical device that goes into the fire pot that just rotates around that breaks those clinkers up and just keeps them in a fine powder and then they'll leave with your ash when you clean out. I think they have a patent on that. Where that is beyond that as far as if we were to put a furnace in at the ACAI Centre, whether it would be that, I can't tell you that. Really, our initiative was to purely have a furnace that would burn grass pellets. Then the hope was the people, who have been talking about this, would actually put up the plant and buy from farmers.

 

I don't know if you remember about Norbert Kungl's presentation that night, but mostly what I've seen is a grass pellet that I can feed to my sheep. Norbert had a pellet like a log, it was about that round and it was in chunks. For a more industrial type of use, where you wouldn't be worried about small pellets, that would work fine. No, we weren't really going to get into the development of pellets per se. We just wanted to provide a place that was an opportunity for any entrepreneur who was interested in putting up the plant and supplying us. At least no one could say there's no place that will burn it. We're trying to say we'll burn it, are you willing to come? That's our hope.

 

MR. PORTER: That's very interesting. That's what I was kind of wondering, are we looking at, you know that you have someone who has a patent on a furnace already. Would we be looking at supporting that somehow but it would likely be through a different department - Economic and Rural Development perhaps - or hearing what you said a little bit earlier about the Farm Investment Fund, would it fit? I don't think from what you have described, that really matches that, that would be separate again in its own development, but a very unique idea and I thought so the night that Norbert presented it. Yeah, I do recall the bigger blocks that he did have, but I guess the intent and the purpose was still the same; it was a greener energy and a much cheaper one. At least I would anticipate it to be over time, once you had purchased of your furnace or whatever was required for burning. But a very unique opportunity in the agriculture sector, I think. Interesting to see where that might go.

 

I want to go quickly to the Farm Investment Fund. We met with Beth and that organization and I know you have as well. I forget what committee we were in, I guess it was probably the Economic Development committee; they were there as well. They talked about having met with you and your department and been told that there would be a decrease in the amount of funding in the Farm Investment Fund. That seemed to be a done deal, there was no room to negotiate, there were no other areas that it could have come from. Those were the kind of questions that I had asked Beth and her committee - was there somewhere else that you could have said to the minister, look, we can't afford to take it out of here. Not that you can afford to take it out of anywhere, they need an increase all around.

 

I know you know that as well, but would there be somewhere else? There just wasn't. I'm sure people in your department would agree there's really nowhere to take anything from. How much of an actual cut is there in the Farm Investment Fund do you see in the coming year?

 

MR. MACDONELL: I think there's actually nothing to speak of. I mean, in the Business Risk Management side, which I think I answered on another question, was around $10 million. There was $149,000 reduction in $10 million, but that's not all farm investment.

 

You probably remember the Beef Income Support money, so that money has come out, it was a two-year program. There's Business Risk Management; $1 million has come out of there. We've added more than we took out or about the same actually. We have our Soil Amendment Program is $400,000, we have our Genetic Enhancement Program for beef, sheep and goats and $500,000 went into the kickoff for the 10-year strategy. Then we have an increase in recoverable programs of $450,000 so the $2 million that I identify, the Beef Income Support which is a program that has ended and the reduction in the Business Rich Management program of $1 million, but we've put about $2 million back in so it really was a wash. The program took a hit last year, but not coming in this fiscal year, 2011-12, it really remains unscathed.

 

MR. PORTER: I thought there was some discussion around $400,000 or $450,000 that they had talked about when we spoke to them being decreased by that amount. The committee met in the last three or four weeks. You've touched on it again this morning and in previous discussion with the honourable member with regard to how you're breaking this down into sort of four different ways - I'll call it sectors. Ways of applying for what I think you're calling or you're describing as the same money and maybe more definitive in how they're looking at doing things. I guess a concern that I quickly read into that is, would that not make it more difficult for the famers who are already discouraged and trying to do paperwork and making applications and so on and so forth to get money out of this particular fund?

I'll just go on for a second on this. I've talked to the farmers out there from Antigonish, Pictou and through the Valley. When you ask them about the Farm Investment Fund and the importance of it, it's clear and well described - the kinds of things that they would use it for. They were certainly very concerned about any decrease or opportunity to access this funding and you can certainly appreciate that I know. Having said that now it sounds like you're just redirecting how you maybe, potentially access this money. Why would we go there? Why would we split this thing into four different potentials as opposed to the Farm Investment Fund? I'm more interest in that than anything else.

 

MR. MACDONELL: I think, if I can find the right part of my speech, basically the programs we're going to talk about as far as environmental, because it wasn't - we're taking the funding from the Farm Investment Fund and then funding that in two other programs. We basically had three programs and we changed them to four things.

 

We had the Agri-Food Industry Development Fund, the Innovation Fund and the Farm Investment Fund - we've taken that funding and directed it into four themes instead of three funds. People would apply for an environmental component out of one or maybe two of those programs, so we said if we're going to get people applying to do environmental work, why don't we set up an environmental theme that they could apply to and allocate funding to that. Since the four main areas out of the three programs seem to be business development, innovation, environment and quality assurance, then we decided we might as well have them apply to that one thing rather than apply to more than one type of fund. Actually, we thought it would be simpler for them, not worse for them and I have to tell you, I've never seen any lack of initiative on the part of farmers if you have a possibility to get some help financially. Anyway, that was really the intent, something that would actually work faster.

 

One of the things I'm hoping will come out of this will be an increased response time, in other words, that we can process applications much faster and get back to farmers so that they can initiate the project and not get caught in November, trying to get something done.

 

MR. PORTER: They would still apply, though, through the Department of Agriculture?

 

MR. MACDONELL: Oh, yes.

 

MR. PORTER: Having said that, I can understand, I think it's important as well that the administrative piece is done faster, that the funds are made available faster given our seasons. Does that take - or understand then that there is more administration managing more jobs in the Department of Agriculture, to make that happen? If so, what's the increase?

 

MR. MACDONELL: Exactly the same.

 

MR. PORTER: Exactly the same. You talked about, basically there's not much difference, only that they're applying through some redirected doors, perhaps, making it simpler, and in the long run it should make it quicker for them. You see it obviously as a benefit as opposed to - what does the federation think? Have you spoken to them yet on this? Have they been well versed in what this means, in the last short while?

 

MR. MACDONELL: I think we have an appointment booked with them on Tuesday, if you let me out. We've got them in the queue. We've been having some discussion with them on this. There's no difference, really, in the money. Actually we have an increase in money, in my view. We want to try to simplify this process, and hopefully streamline it so that it just works a little bit better. That's really what we are hoping will come out of it, a little more efficiency.

 

MR. PORTER: I certainly hope that's the case. I've talked to different ones over the last while and the stories you hear - I'm sure you've probably heard them as well - are of more difficulty in getting through the process. Sometimes only small dollars are wanted, but they will tell you that they are unable to access that fund, for whatever reason. I think, sometimes, maybe they don't fully understand the government bureaucracy or the administrative piece of it and the how to.

 

But at the same time I don't know how clearly simplified that is made for them. I think that is probably the bigger part that they understand what is available to them and it is made easy, so I do hope that it is favourable to them and that does work and it means something to the farm community.

 

Just sticking with that a little bit, you also talked about the farm loan and the bad debt, what's the figure there for bad debt on average? Is it up more this year or last year than it has been over the years, or do you know?

 

MR. MACDONELL: I think for our fiscal 2011-12, I'm going to say - in the last month, the write off was in the range of $10 million, mostly hog debt for last year. I think in the previous year we wrote off hog debt, as well, and probably there will be some, we're not anticipating that large amount. Some of how this happens is purely based on the individual producers' situation. They've kind of all been coming at a different timeframe, depending on their operation and circumstance and whatever.

 

The debt a month ago or so that I mentioned was the individual's debt. For paper purposes, for accounting purposes, that debt was written off the province's books a year before that. Basically what we did was cut our ties with the individual because in some cases, the accounting of the debt, writing it off for accounting purposes, doesn't mean we still won't try to recover that from the individual. The question is at what stage do you finally decide you're not going to get that? That's what you saw a month ago.

 

MR. PORTER: And I wonder, minister, just for the record, if you can explain on the record to the taxpayer, how their money is lost in this case? What that deal is, you know, and what method of recovery that you might use, just to clarify exactly, you know. Give an example of a debt that we've lost out on, as taxpayers have lost out on, and what methods you have used to try to recoup the money from?

 

MR. MACDONELL: Well, Mr. Chairman, that's a really good question. Let's say, for instance, we have an operation that we've been funding, they may have a loan with the Farm Loan Board. So, you know, when they come to us - we'll assume, let's say, we're of the expectation they could make their payment, you know, and they have a $2 million operation. We would look at the assets and everything and say, well, this is what you're worth and considering their present debt load. So, you know, we'll lend the money based on the equity. If it turns out that that operation goes in - and I think that's really what has happened with a number of hog operations because of the Canadian dollar, transportation costs and other factors, commodity prices that they had no control over, you know, a glut in the market, loss of the Asian market, whatever. So they come to us, and the province will try to help those guys out on the idea that, you know, in two months or six months it will come back and they'll get their money back.

 

I think what had happened over some time was that it didn't come back and the province kept trying to help them. So let's say the province says, well, you've got $2 million in assets and that's what we feel we can lend you, over the next three years, or five years, or whatever, they lend them another $2 million thinking it will come back. So you've got a $4 million debt. What happens is the province will take the assets on the assumption that they still have $2 million and they take the hit on the other $2 million. The taxpayer takes the hit on the other because there isn't enough value in the assets to cover $4 million and they knew that going in.

 

The questions around when do you do that or what is reasonable, I mean they're political, they're whatever, and you know, if you were to try to get all of the market variables in line to say if we do this now, in six months can we get this back, and that probably would seem like a reasonable expectation. Now, we didn't lend them $2 million for six months but had lent them $250,000 for the next six months and then another $250,000. So then what happens, at some point, you know, the government decides this is not coming back in a way that the farmer can recover it and pay us back and that's when they call their loans. Basically they say no more. We may not have called their loan, they just might have stopped funding them and worked on the asset thing over a number of years which is really what has happened with the industry here. The province has not been aggressive in pursuing hog producers. That's just something that over time each one of them has tried to settle whatever way they could with the Farm Loan Board. So the taxpayer wears the difference, I guess, is what happens.

 

MR. PORTER: I thank you for that explanation, just for the record and to be clear. It's really, you know, when you look at the number, you could almost say that the number is not a true number because we don't aggressively - it shows the loss but we're not doing much by way of - I guess it's hard to say - the old saying, it's hard to get blood out of a stone when it's not there. It's a clear loss to the taxpayer, unfortunately, is what it is.

 

MR. MACDONELL: Right.

 

MR. PORTER: And I'm assuming the Department of Finance must be the ones that are chasing, or who's chasing these folks down, for lack of a better term, you know, and trying to do the recoveries? Is there someone in the Department of Agriculture who's doing all these analyses that you were talking about, saying okay, your credit is good, we can lend you this much, in going through all those steps like a bank would do, or is there a bank actually doing it on behalf of you?

MR. MACDONELL: Well I'm thinking that the statement you see probably comes out from the Department of Finance, which actually shows the Department of Agriculture and the Department of Economic and Rural Development and Tourism - it shows all of the departments. Some of them are not in the same place as the Department of Agriculture and the Department of Economic and Rural Development and Tourism, but certainly it would show the unrecoverables, or what the write-offs might be, in terms of each department. Maybe Weldon can give me a more precise answer.

 

The write-offs would be with the Farm Loan Board, but I think it would be what we would term as a consolidated debt would be with the Department of Finance.

 

MR. PORTER: You talked about the student enrolment at the Agricultural College being up. That's a good thing, don't get me wrong. Do you know why? I'll just add to that a little bit. In talking to the farmers, everybody says, I wouldn't hand this off to my son or daughter for all the tea in China. Not only would they not, there doesn't seem to be an interest in the farmers - I can't think of any right now who have told me, yes, my family is standing by. These guys are talking about how they're going to get out, an exit strategy and sell and will there be somebody and what will the process, or the ease of process, be for others to come in and purchase, whether it's the immigrants or whomever. Any idea why the numbers are up if we're seeing such a decrease in the excitement of farming in Nova Scotia?

 

MR. MACDONELL: Well, oddly enough, it may be because of the tea in China. There is a significant student component from China and the department has been aggressively pursuing foreign students anyway, so yes, that's a big part of it. They're taking whatever expertise they learn back to their home country and perhaps, luckily for us, in some cases they don't go, they stay and we get to use that expertise.

 

There's a whole wealth of opportunities for students who come out of the programs at the Nova Scotia Agricultural College and they're not all going into farming, into primarily production. Some are heading into veterinary medicine, some are heading into the food service industries, some are working for agri-business, aquaculture. So yes, there is a whole world of interest there, of job opportunities for students who come out of the Agricultural College. I know it's easier to remember the doom and gloom, but there are a lot of very good stories on primary production in agriculture. There are people, who you don't always hear much about, but they're kids - actually the horticultural sector in this province, there are some people doing some really great things there and I've got to say, their kids are going back to the farm. It's really encouraging.

 

If we could stabilize or create a beef industry here that people can make money on - that and hogs, I think are the two components and I don't have a magic wand for hogs, although I think about what might be possible. Certainly, on the horticultural side - we know the supply-managed side is relatively stable. I think blueberries are now coming back. They had a really bad year a year or so ago. The mink industry is really doing something. There are a lot of really positive stories in agriculture and they don't get stated enough, but there are a lot of good things happening.

 

MR. PORTER: You're right, there are some really good sectors that do appear to be surviving. It's strange though, you don't hear too much about them. You hear more about the beef and the hog. I guess maybe that's because that's where people's minds are or that's maybe all they hear about.

 

Do you see at some point where there's just certain aspects that are going to go away, to be done with and finished, and only the strong survive theory where horticulture is great, blueberries, apples are pretty good, generation after generation. There are Masons in my area - as an example of apples - who are doing wonderful things and very much internationally based. There are some things - we've seen the hog industry almost die, as an example, but there are a couple who are doing different things in the hog business - the Becks in the Valley who are shipping them for finishing and processing in Ontario. Terry was confident, he said, it's great today, might be gone tomorrow.

 

There's no real long-term, but it's working right now, which is good. But it's amazing that we can't do that right here. It's unfortunate that we can't do it right here and maybe we can. As the minister, the head of a department, do you see the government focusing on what we know is strong? We know what's not. Do we need to focus on the strength?

 

I'll go back to the student enrolment piece to go along with that. Yes, it's wonderful that I think the Agricultural College, like many universities, are looking worldwide for students to come and invest to the school, which is a great school as well and we all know that. With that same question I just asked you, are any of those students staying, or is there a percentage that you're aware of that come from abroad that will stay in Nova Scotia, to either work or start in hopes of starting a farm of their own at some point, which will of course maybe answer the question I asked first with regard to the focus on only the strong survive?

 

MR. MACDONELL: I'm not sure that we have accurate numbers that would show the link between the student and the staying; the Office of Immigration might have that. What we're hoping is that these people will stay, I'm not sure that we're expecting that many of them are going stay because of their undergraduate degree at the AC, but if they become post-docs or research assistants, we're thinking there's far more potential for them to be staying around doing that kind of work.

 

I don't think we have any clear numbers at hand that I could give you easily to say here's who went to the AC and here's who's staying. I don't think I have that.

 

MR. PORTER: Let's talk a bit more about that and the immigration piece. I know there's a focus and we'd certainly welcome immigrants and some have already come and seem to be doing fairly well from what I understand, I don't know them.

What incentives, if any, would be in place for that kid who's coming from China or the U.S.A. or wherever they might be coming from around the world, or even our own here in Nova Scotia - kids who want to go to Agriculture College who want to be farmers? There are a lot of them, I know a lot of young people in the 4-H movement and I know you do as well, who just love the aspect of farming even though they don't live on a farm but they love what they do with their cows or their chickens or whatever part of that it might be. I know that's an incentive to say agriculture is important to us in Nova Scotia; it sort of drills it home and they understand it. Are there any plans or incentives that are going to be in place, not only for the immigrants - that's an important piece and you can speak to that as well, I know you will - but for our own kids? I know the universities all want them, the NSCCs all want them, but what about the agricultural industry?

 

We're trying to keep it and we know we don't want it to go away. I've never heard you say that you see it as going away. It's a difficult time; I think everybody realizes that as well. There has to be some kind of incentive if you want young kids like Justin Jamison, as an example, who is 16 years old, loves agriculture, but he's a smart kid. He's a guy who's got it here, knows all the real technical parts of things, but yet at heart he seems like a real farmer. He could go and work on a farm and be happy his whole life, or he could be a scientist. Not that they don't go hand in hand, they do, I realize that, maybe a poor analogy, but it's the incentive piece that I'm kind of curious about. Are we going to make an investment in our province and in youth, maybe specifically, to keep them here in the farming sector?

 

MR. MACDONELL: I think you had a couple of questions there. There is no more incentive for a non-Nova Scotian than for a Nova Scotian. If somebody is going to be an immigrant, I think probably in their case, I think the way we look at the immigration is that we hope they bring investment with them is our hope. For the new entrants component of what we do - incentives, ways to - I mean really there are probably two difficulties for new entrants. One is experience and the other is access to capital. We can say, well look, we offer farm loans and we're a compassionate lender and whatever. I have kind of wondered around the lack of ability to incent with our present - a little over half a million dollars for interest, I think, for two years - for a new entrant and there's a maximum on that.

 

I've asked my staff to look at what other things we can be doing, because if funds are limited, if you have someone who has been farming for 40 years and he has got most of his capital investment taken care of, he has built his buildings, is that someone that we really are going to keep the same programs available to or should we be saying, look, after X-amount of years or X-amount of dollars or X-amount of something, you don't qualify for funding and we're going to put more of those dollars to incent younger people?

 

We haven't redone that, but just to give you an example of the Genetic Enhancement Program that we came out with for beef producers here recently, we put a new entrant component on that so it's outside of our present new entrant program. We say we want to give a little more incentive if you're a new person starting out in the beef industry, that you can get something the people who have been around in the beef industry can't get.

 

I think it's that kind of approach that whatever programs, what additional programs we come up with that we can try to put a new entrant component into those so that the new entrant is not thrown into the mix with everybody else. Somebody has been doing this for 30 years and a young person is starting out with all these hurdles, then why would we think that the person who has been at it for awhile should have exactly the same program? It seems to me that if there's a program that's good for a particular sector, then there should be a way to help or divert funding out of that program so that you put more of it toward making it a little bit easier for a new entrant using that program.

 

I think, as we develop programs, it's my interest to see that we can enhance what we do around the interest forgiveness part, which has been around for awhile. Successive governments have done that, but I'd like to see something more. What we did with the genetics program for beef where we put a new entrant component into that program itself is what I'd like to see more of. Some of those people may not have to go to the Farm Loan Board at all, but actually this is a way that they can get an advantage as a new entrant without having interest pay-down at the Farm Loan Board. They may not want to go to the Farm Loan Board, but they'll actually get a little bit of a benefit from this program if they want to raise beef.

 

MR. PORTER: I guess what I was thinking about as well by way of incentive was, you know, a couple of hundred years ago, when they set up the place, parcels of land were given - here you go, here you go, here you go, it's your responsibility - and what did they do with it? Well, they treed it or they farmed it or they did whatever. We've got these kids all coming out of the Agricultural College. We've got farmers who are trying to figure out an exit strategy for themselves - and when I say that I mean by way of retirement - what will I do with my farm? Is there some combination of things that could be considered in the taking over process?

 

I remember talking with a young gentleman, a new farmer in Antigonish County when I was there that day, and he took over a farm that had been there, a very successful dairy industry but he was clear when he said there was no help from the government. There was nothing here from government to say - and I'm not saying that government should be all things to all people or they should just hand over money or anything like that. But when we're talking about things like farming and the longevity in this province of farming, are there incentives, even if they are payback incentives or free money, grant money, whatever you want to call it. (Interruption) You know what I mean? He couldn't even acquire that but yet he's got a very stable operation there. The two old guys who worked it are still there every day, quietly making sure that what they invested in throughout the course of their lives will continue to be successful with this young man at the helm. It's pretty amazing, actually, watching that happen.

 

Anyway, I'll leave that. I know there's a lot of other stuff I want to cover and time goes by quickly. You talked a little bit a few minutes ago about $500,000 kickoff for the 10-year strategy. Can you tell me about the $500,000 and where that's going as part of the kickoff strategy?

 

MR. MACDONELL: Next week actually we were going to have a discussion with the federation on this. I'm not entirely sure that - I think I've indicated someplace that I'd like to see more money go toward new entrants, so the question of how to implement that, we haven't quite figured out.

 

The other issue is that if we're going to bring in regulations for the mink industry, and I'm thinking we may want to have some funding along lines of implementing those regs, so I think until I have some kind of discussion with the Federation of Agriculture - but one of the key components I'd like to see us address has been around new entrants. I've mentioned to my staff that I'm very interested in doing more on organic. Although I wasn't expecting we would do this in any short period of time but one of the things we campaigned on was how we do extension in the province, so I'd like to have a re-look.

 

We did some reorganization last year and I'd like to take a look at what might be possible in that regard. We have an interest in the bee industry, we think this is an area that we probably should be thinking about growing the industry. One of the things the industry has asked for is a specialist person that they don't have, so I think we're trying to figure out the best model to do that.

 

We lost our entomologist in the 2000 cuts to the department so those are all kind of new areas where we're looking that we might want to - but whatever we do, I'm kind of hoping to continue, so if you hire a specialist, that's someone you want around for a few years. I'm not really looking at $500,000 to kind of kick off the 10-year strategy, on the idea that that will be a one-year thing. Those are some of the places where I'm thinking I would like to see some investment but I want to have some discussion with the federation on that.

 

MR. PORTER: Thank you, minister, I almost thought I was in Question Period there for a minute, because you've said a lot and said nothing at the same time because it almost seems like you're holding back until you have that discussion. Are they going to lead you in a direction, do you think, to help make those decisions? That's the first question and I'll throw this in on top of it, all that you've said then, really, is I want to go here, maybe I want to go there, et cetera, I'm going to talk to the federation and I appreciate that, but how do you come up with $500,000 then as a line number, as a kick-off figure, why wasn't it, I don't know, $500 or $2 million? I mean, how do you reach $500,000? I know you talked about a person, but that's just this year. Certainly you're not going to pay them $500,000?

 

I mean you talk about regulations, yes, I guess there would be some money to draft some regulations and implement and so on but, again, I'm just kind of curious as to who's really going to give the direction and how do you come up with a figure?

 

MR. MACDONELL: Well, I think as far as trying to make a credible message to the industry, we came out with Homegrown Success and I think if we were to try to make the case that we think this is important but it's not important enough to fund, I think the industry would say, well, you didn't really mean what you said. So I think you can probably appreciate, as much as everybody can appreciate, the constraints we've been under.

 

We've actually increased funding in programs so it's a big deal, you know, to actually have been able to get a little more money when everybody else was getting less. So, we want that $500,000 into programs and so I think you might say, well, you know, you're not necessarily seeming sure of what you're doing, well, we have commissioned a study on the bee industry and only just got the report a month ago. There were some issues around the moratorium for keeping bees out of the province.

 

So these were all things that had been up in the air. So, yes, since we're not always 100 per cent sure of every item and issue, and the fact that I have an interest in growing the bee industry doesn't necessarily mean anybody else has an interest. It might have turned out that that report might have said something, you know, completely different around the moratorium and whatever. So that just kind of indicates, even though we're coming down the timeline for the budget and saying, look, we really think we should be making a case for funding to kind of help kick off the 10-year strategy, so we're going to ask for $500,000 and see if we can get it.

 

Believe me, we can find places for it and now we have an opportunity to have a discussion with the federation to say we got it, rather than to go to them with none, and so, yes, I mean that sometimes is the place you find yourself but, you know, I have a number of initiatives that I think would use up that money but I want to try to ensure that they're the best bang for the buck. So we'll see what the federation thinks of what I'm thinking and, hopefully, do it in a way that they feel is actually meeting our commitment to move the industry forward.

 

MR. CHAIRMAN: A time reminder, we have about 10 minutes left in the Progressive Conservative caucus time frame and if the minister would like a five or 10 minute break after that, we're certainly open to that. We'll decide in 10 minutes on that.

 

MR. MACDONELL: I'll keep you posted.

 

MR. CHAIRMAN: Thank you very much.

 

MR. PORTER: Okay, I better move on to some things here. The limestone assistance program, how does it work?

MR. MACDONELL: The limestone assistance is covering the transportation costs and we did two things there; we increased the coverage, in other words we pay more, and we included wood ash. It wasn't included before. Those are the two differences in that program previous to other programs.

 

MR. PORTER: Dead livestock pick-up - a farmer has a cow die - do we do anything to assist in moving that livestock right now and getting rid of it, or do we leave it strictly to the farmer at their own cost?

 

MR. MACDONELL: I'm thinking we don't do anything. We contribute $30,000 to the federation, they run the program and it's really only in the central part of the province. I'm surprised, actually.

 

MR. PORTER: I was just wondering, it's only in the central part of the province mostly and the federation dishes it out as farmers apply for the assistance. Okay.

 

I shouldn't say this - do you foresee any increase in that? I've just had a couple of questions on it over the last while, and maybe some farmers may not be aware of it. I'll have to leave that to the federation, perhaps, to figure that out; $30,000, I don't really know whether that's enough, or if it's adequate or how much of that's used, but would you see an increase in that?

 

MR. MACDONELL: It's a federation committee; they're nominated to go on it, so I'm thinking the federation should know. I would say that considering where we are in terms of our budget, there's not going to be an increase in that.

 

Actually, I have to say, and maybe you can tell me your own experience, but in 11 years of Opposition and almost two years of being a minister, I have heard so little. It's just not an issue that people are phoning me about, never have - unless you have a different experience?

 

MR. PORTER: No, just an inquiry and that's why I wrote it down just as a quick question to see where it was.

 

I want to move on, with the few minutes left now, a little bit about buying local. Can you give me a definition of what buying local means? What is local product to you? I'd really like to hear. We've never been able to define what local means.

 

MR. MACDONELL: It's not what you can move in 24 hours, I can tell you that. I had always heard this definition of local was whatever you could transport in 24 hours; that could be halfway around the planet.

 

I think the definition that I've seen actually had the word local in the definition, which I thought was odd for a definition. It said, for purchasing of items in your immediate area, in your community. It didn't give a distance, it didn't give a time. It said whatever people generally in your area would deem to be the local area. That was it. I think I even asked the trade office in Ottawa, I know I contacted - I thought it was an office in Ottawa to ask if they had a definition of local and I'm not sure if that was the definition they gave me or they didn't have one.

 

We were trying to make an argument against anything you can move in your area in 24 hours, from outside, and that wasn't considered as a definition.

 

MR. PORTER: I wonder if any consideration has ever been given, when you think about local and you talk to a farmer and you ask him, what does local mean to you? He'll tell you, off my farm, or at least within the province. The 24-hour thing, I've heard about, but you can come from almost anywhere in the world within 24 hours and it's hardly local. We have to give some serious consideration to that as part of that commitment and you've heard me use that word before. We don't have a commitment yet in this province, I don't think, not from government, governments in the past, certainly not from citizens; they don't seem to be committed totally. I think they're trying. There is some more buy-in and the more we do to promote that, the better that will be. I think that the dinners and IncrEDIBLE Picnics have been successful to some degree. (Interruptions) I've been there, absolutely and that's why I say I believe that they are successful. There are people who get into different programs, even through local farmers selling their produce. There's one in my area who did great guns last year by way of growing just about anything she could and had a commitment from buyers to take part in that, so it was good.

 

I don't know what we're going to do or where we're going with it, but it's going to be an ongoing battle for the years ahead and trying to instill that in Nova Scotians as to what local means, what they're buying, to be cautious of that. I know we're running short on time and I do want to pass the last couple of minutes to the honourable member for Cumberland South. I just want to close this session by saying that we really need to focus on buying local, the promoting of incentives for farmers to stay in business and new business and new entrants and all of those things. Anyway, I'll pass it off, Mr. Chairman, to the honourable member for Cumberland South.

 

MR. CHAIRMAN: The honourable member for Cumberland South. We only have about three minutes left in the Progressive Conservative time frame.

 

HON. JAMIE BAILLIE: That's very generous of my colleague then to share three whole minutes with me. I think I'll do a short snapper then and I'll come back when we reconvene. I am particularly interested this morning in the maple industry, which is a very important one to Cumberland County, as the minister well knows. Cumberland County is known for blueberries for sure, but it also has a very vibrant maple industry. In fact, the minister was in Mapleton, which is in Cumberland South, to launch a new insurance plan for maple producers, Agri-insurance. We did have a very tough winter since that time and I'm just wondering if there have been any claims or if any of the maple producers have taken advantage of that insurance program and what their experience has been.

 

MR. MACDONELL: I wouldn't know that, actually and I'm not sure if anybody here - because the Crop and Livestock Commission is separate, but it's under our umbrella, but we can find that out. I was actually to the blueberry growers meeting here a couple of weeks ago, only by default because I was invited to the Nova Scotia Cattle Producers AGM and in the next room over were the blueberry producers and I didn't really want to leave the building without going in to say hi. Avard Bentley, who is our chairman of the Crop and Livestock Commission is a blueberry producer and a maple producer. I've been to his operation. I just asked him how the run was going, but he didn't raise any issues. Actually, as far as making a claim, it might be a little soon in the season because I'm thinking they're still collecting sap right now so for them, it might be just a little too early to be making a claim, but I wouldn't know that to be positive.

 

MR. BAILLIE: If there is further information that is available, I'd be happy to receive it at a later time. I know it's early days, but it is a program that was well received by the maple producers and I would like to stay on top of how it's going from the responsible divisions, so thank you for that. Mr. Bentley, who you mentioned, I know well from Westchester Station and he is one of a number of very capable maple producers in Cumberland County.

 

Mr. Chairman, I was remiss, I didn't put two and two together, but the member for Cumberland North is also here and today we are the Cumberland caucus as we ask these questions on areas like the maple producers and blueberries and so on. I'm probably at my time limit now and so I will conclude for this hour. I do have some questions on blueberries and other things for when we next have an opportunity. Thank you.

 

MR. CHAIRMAN: Thank you very much. That does conclude the Progressive Conservative caucus time. We will take a five-minute break. Thank you.

 

[12:26 p.m. The committee recessed]

 

[12:32 p.m. The committee reconvened.]

 

MR. CHAIRMAN: Mr. Minister, I think others will be back in the room in just a moment so I think we will start with the hour for the Liberal caucus.

 

The honourable member for Kings West.

 

MR. LEO GLAVINE: Thank you very much, Mr. Chairman. I am pleased to have some more time to almost converse with the minister, perhaps may be the best way to describe it, as opposed to a drilling down here.

 

I know that Mr. LaFleche is not in the room and Leo is here. I was only saying that from the point of view that I am very pleased to be able to say, and I wanted to put this in the record that the minister - you weren't here, Mr. Deputy, and I did want to put into the record that the minister and yourself and Mr. Muise, in relation especially to the mink industry, have made themselves very available when I have a very local issue, on a farm next to me, or a larger provincial issue. I appreciate the opportunity to have sat down on a number of occasions during the past year, to at least help satisfy my query about whatever the matter was; so I thank you for that.

 

In fact, I just had a query yesterday and I was planning to meet with the Spurr family from my area. I'll soon meet with them, possibly over the weekend, I'm not sure. I'm sure the minister is probably glad to hear they are very busy planting potatoes right now, so we may not have that opportunity.

 

They have an issue that I think really does need to be looked at. I know generally about it but I think I'll read into the record. Lisa Jenereaux, who is the next generation of the Spurr family - it's wonderful to see her commitment to agriculture generally and, of course, their farm in Melvern Square.

 

Here's something that has developed that she and her father Bill and his brother Gordon have now observed. She says: Our acreage is - and this is to deal with crop insurance - our average is based on 15 years of production. This year we have the option of 10 or 15 year average, I believe mostly because of a situation that she was in. The apple industry has changed so much it is unlikely that the last five years of production relate anything to the 10 or 15 year average. Where we used to get 500 bushels to the acre, now we can achieve 1,000 bushels.

She said, please feel free to use my farm as an example of how poorly the system works. One thousand bins of fresh fruit were picked for juice, which is one-third of our fresh fruit crop, and we didn't trigger a claim. In other words, there were problems in the early stages of growing, which obviously show up, strongly, at harvest time. So they had to put 1,000 bins into juice and it didn't trigger a claim. Other provinces like Ontario have a six-year average with a buffer for a bad year.

 

The second problem of immature orchard is based on the first 12 years of a tree. We are in full production by year five, in a lot of orchards, and this explains how things have changed. They've been, of course, some of the long-time producers. I mean, they're speaking from three, four generations of growing apples, pears and some other fruit crops. This also is in keeping up to the changes.

 

Ontario seems to have a relevant crop insurance plan, one on which we should model. The commission is so stuck on this 10 or 15 year average because they don't understand the changes that apples have made over the years. She said this is an issue that she's hoping that I would address here during estimates. Perhaps as I drill down on it more with her, to actually see, because that translates into how much they would normally get in a year because we're talking here about top-notch apple producers in Nova Scotia and this is the kind of impact that now will lessen their ability for new plantings, new cultivars that they're generally always on top of. This will limit how much they can invest in their farm this year because they weren't able to get anything from crop insurance, which if this were a farmer in another province, it would have triggered a claim. I'm just wondering if the minister would have staff to take a look at a possible updating in relation to the new varieties.

 

MR. MACDONELL: An interesting point. I know the Spurrs. I've been to the farm and like them very much, I have to say, they were very gracious to me when I was there, a lot of interesting things that they're doing.

 

That's something we can have the commission look at. I have to say, when the Leader of the Progressive Conservative Party raised his question around maple producers and applications to the Crop and Livestock Commission, that program really came as an initiative on the maple producers' part. They came to the department and asked, is it possible to fund this under crop insurance? I'm not sure if we can actually pursue that. I think we probably would want to dialogue with fruit growers before we initiated any kind of program, but we'd be really interested to take a look at that, if they think Ontario is the model, we'd be glad to take a look at that. Maybe British Columbia has a better one. We'd be very open.

 

For us, it's kind of a difficult one, I think maybe for the Minister of Finance in the sense that - I think, presently, right now, for what the coverage is for the Crop and Livestock Insurance Commission, I think they've got $5 million in their account and I think we're of the view that if there was a financial pressure, it wouldn't be significant to the province. Anyway, as it turns out, because you can't necessarily book for disaster - if there's a draw-down on which we contribute - then that creates a little bit of a pressure. You enter into the program, based on us as a partner, that that's a possibility.

 

Yes, we'd be pleased to look at that. Certainly staff at the commission could crunch the numbers and determine actuarially where that might possibly be. The present program is one that has been around for a completely different industry and maybe since we've upgraded the industry. I want to say, your comment around they can't invest in renewing orchards and that, but we've had orchard renewal programs subsidizing that for seven years. I think this is the last year. It's amazing what that industry has done. It is a success story so we'd be glad to look at that.

 

MR. GLAVINE: As the minister well knows, you may not have a Valley-wide disaster issue in relation to the apple crop because we have a number of micro-climates in the Annapolis Valley. You can have a minus 2 or minus 3 degrees in one part of the Valley and you're right at zero or a degree above as you get closer to Grand Pre and the Minas Basin. They had some early problems with frost on the apple buds and of course it follows right through the whole growing season in many cases. What you thought was going to be fine for the fresh market, based on historically what that farm produced in this particular year, they were fortunate to have potatoes and they're now into strawberries as well on a significant scale.

 

Touching upon where the industry has been, having bottomed out and made a wonderful recovery, significant to it was the Honeycrisp Orchard Renewal Program, but farmers are still talking about there are a lot of trees that really should be removed from orchards. They have to be looking at what is the next cultivar that comes along that will keep them competitive, especially in the North American market. I think the minister knows where I'm going with this because with horticultural crops, we all know that a one-year window is just what it is, one year. Looking at five years and beyond, as Lisa was pointing out, now you can have some of the new varieties in strong production by year five. Having a five-year projection of how you're going to be renewing your orchard, making the kinds of changes, I'm wondering if the department is contemplating continuing that program. Again, there is still a lot of room for continuing that program.

 

Again, it's a crop that has a lot of competition. We know how China is moving swiftly into the fresh market, so therefore to remain as a strong industry in the Valley, our most historical industry, perhaps it's sounding like there's still a need for this. I'm wondering if the department will be looking at that.

 

MR. MACDONELL: I'm just not sure what the right expression would be that, either you're barking up the wrong tree or you're out on a limb on this. The orchard renewal program was a five-year program, which became a seven-year program. I remember being at the Federation of Agriculture meeting - I wasn't the minister at the time - and saying what a good initiative I thought it was, only to see Anthony van Oostrum at the back of the room going like this. You would know what a credible individual he was and Anthony's contention was every farmer should be replacing his orchard a little bit every year anyway.

 

For us, we indicated to fruit growers that the funding we gave them for this year is it, that we'd be very interested if there is some other initiative that - and I'm not thinking of an initiative of another variety - I'm thinking of some other research; some other thing we could do that would be helpful. I think we've helped them reshape their orchards, in particular for the Honeycrisp and there are probably other varieties, but also to show them - because we only paid part of the cost on the tree - that it's well worth it for them to do this. We would expect that this would be something they would deem valuable and would carry on on their own.

 

I think in terms of our 10-year strategy around innovation, if there is some other need that they would see that would help advance the industry, I think we'd be glad to look at how we can partner and help them out with that. As far as seven years of the government subsidizing orchard renewal, I think that's a pretty fair contribution.

 

I want to just say, the federal government also had a program and we've written them to see whether or not they would continue that program and we haven't heard back from them yet.

 

MR. GLAVINE: While I think of it - and you did make a couple of references today - I know one of the Hennigars who now has an entire organic orchard in the Valley, in the Canning area. Again, it's tough for the larger commodity farmer to do both. There just doesn't seem to be the ability to do that. I'm just wondering where you see not just organically-grown apples, but that whole organic movement. Is it getting some fostering, and so on, from the department? I know we have in Dr. Martin an outstanding expert proponent and deliverer of some programs.

 

I'm just wondering where the department sees itself in relation to continuing to respond to what I see as a growing constituency, as a growing number of Nova Scotians who are looking for organically-grown produce. I know many of the farm markets have tapped into this. Some of our restaurants now, they use exclusively organically-grown through contracts with farmers on a year-round basis, providing through greenhouses as well, an extension of their year. I'm just wondering if the department and the minister have any projections and goals in developing, assisting the organic agricultural movement.

 

MR. MACDONELL: We're developing an organic strategy and one of the things that I had asked my staff late last summer was around what we can do to help incent, foster and develop more organics. That's department people actually working with people in Kings County on this. Organic producers can still make use of all the programs that we offer to anybody else. I think what I was hoping or wondering, or whatever, is there something else we could or should do that focuses specifically on organics? That's what we're working on: to see what more we can do around the programs we have. If that means another program or some kind of enhancement of programs that we could actually help incent more organic production, I think we're curious to see as it sounds so simple.

 

We had been working quite closely with a half-dozen producers who were interested in selling organic milk. That is so close to being there but not quite. There are just so many issues - actually, processing is one of them - and it's such a small volume of milk and those producers are all over the province. They're miles apart so collection of that milk and getting it to a processor, it's such a small amount of milk.

 

Yet we have organic milk coming in from Ontario and we're thinking, shouldn't that be produced by Nova Scotia producers? We have these individuals who are interested so we are - I guess it's probably more "they" than "we" - but we've been trying to see how we can be helpful to overcome some of those hurdles. It's easy to say the word "organic" but it's not necessarily easy, on the ground, to get it.

 

But with that said, certainly it's one of the areas in agriculture that has had constant growth year to year, so I guess that's why I think it's something that's worth investing in, in kind of a strategic way, to help move that along. We're not there yet but I'm hoping we will be very soon.

 

MR. GLAVINE: That leads me into a few questions on the local food consumption, local food movement, which is getting good traction right across the province, perhaps some areas more than others, visible through the farm markets, of course, and here in the city through the waterfront market and also, of course, the growing opportunity to get product on our store shelves. I know last summer, for the first time in awhile, farmers were able to go right to the produce manager. Sobeys, in particular, were very receptive and there were farmers who were taking product to the South Shore and directly to other Sobeys outlets, as opposed to shipping everything to Debert and then back to the Valley or back to the South Shore.

 

We've made some progress there. I know you made reference to this in a remark earlier but I've looked at some other jurisdictions, especially in the northeastern part of the U.S., and they've made some pretty hard targets to work to achieve a percentage of food consumption that is locally grown, locally produced, the value added and so forth. I guess, in my own career, you set a goal to achieve at least a percentage of your students having success. Having coached 30 hockey teams over my coaching career, I certainly set a goal.

 

I'm just kind of lost as to why we haven't set (Interruptions) I'm talking about the big goal; I'm talking about a target. Why would we not establish at least a target? I know you want to see us move from 13 per cent to a higher percentage than the GPI study, which was 64 items in the food basket that came out last summer. I'm wondering why we wouldn't at least put that out there to strive for.

 

MR. MACDONELL: If I could legislate "buy local" I think I might set a target. Because of Chapter 9 in the interprovincial trade agreement, which is a limiting clause that says you can't interfere with the flow of agricultural goods, you can't make anybody buy local. Been down that road, thought I could do it some years ago when in Opposition. I really tried to write that legislation only to find that because Pork Nova Scotia is a marketing board created under legislation, in that legislation it has the power, in the Act, to set a price for pork. Now, imagine. But if they went to Larsen's and said here's what we want for our pork, they would just say, I'm sorry, I can get it out of Quebec, Manitoba, wherever. So my notion was if I could write legislation that forced them to buy the local pork, then they'd have to negotiate price.

 

Now, that legislation was going to include the caveat that it would have to be to a certain quality. You just couldn't sell them garbage and expect them to pay for it, there had to be some protection for the processor and the consumer. Anyway, after a few months of trying to get this done, I contacted the Department of Intergovernmental Affairs, Greg Bent, who said, why didn't you come talk to us because we helped write the interprovincial trade agreement, and then they were the ones who told me I couldn't do it.

 

I think the notion of targets is a very good one. I think that it's difficult. I'm not sure of our capacity around labelling and I mean forcing labelling. Some producers would like to have Select Nova Scotia labelling; some would like to have Select Atlantic. I know I'm carrying, in my briefcase, a document about what we produce in Nova Scotia in terms of vegetables and how many tons, or whatever. I hear the numbers are quite low on the local and I'm going to go hide somewhere for a week and crunch my own numbers and see if I come up with the same thing. I know that on milk, eggs and chicken, we're 100 per cent; basically we produce all we consume.

 

We produce three times the carrots we consume. Now, if we can't find carrots, it doesn't mean we don't produce them, it just means they're being sold outside the province. You would know that we can't consume all our apples, we can't consume all our blueberries, so the issue is around what it is that we're short on to make that 13 per cent, because if we're 100 per cent on milk, eggs and chicken, we're over 100 per cent on carrots and there are a number of other things that we would at least be at 100 per cent. I'm thinking the numbers are better than what I've been told, but I haven't done the close - I'm not a specialist and I really shouldn't be saying it without backing it up.

 

I guess there are two issues. One is local and one is food security, which seems to be tied up with it. The big one for me is profitability because I've said that if every store shelf everywhere had local content, all we could produce and all we could consume, and farmers were going broke, what would be the advantage of that? That's what we deem to believe is important around the message for the consumer, which is what we try to sell in Select Nova Scotia is to say that you ask the produce manager or the store manager, where's my local or whatever - or probably even better, if people never bought the non-local. If it stayed on the shelf while people were looking for local that would probably send an even more significant message. The ability to direct that as a government is pretty limited, but I think the educational part is very good. What you mentioned about Sobeys is kind of indicating a change in that.

 

I think to try to keep this issue top of mind for consumers so that they drive that agenda, I think you'll see more movement in it faster. The one component of this that I feel - as much as I can help it - is to ensure, in some way, that farmers can make money from what they're doing. That I think is our role in terms of our 10-year strategy: research, innovation, value added, the kinds of things that we could support them with programs and money that kind of takes it from the blueberry to the blueberry juice, as Case Van Dyk is making. As much as we can do that actually makes those entrepreneurs providing a product that the stores really need. Or if you think about, who would have thought that in trying to selling a whole turnip doesn't really seem to be the best way, but if you slice it up and then kids eat it as a snack - I think the RANS and a number of other people are really doing a good job on that. So the question of how much of that is local then, I think as much we can do it by labelling and Select Nova Scotia awareness by the consumer, I think those are probably our best avenues.

 

MR. GLAVINE: I thank the minister for that answer and exploring some of the next steps where we can advance local food production and local food consumption. One of the areas is always the reality of our climate and our growing season. It's interesting that farmers are doing quite a bit to try and extend the shoulder season so their growing operations. The greenhouse industry has some bright spots but I'm wondering if the department's work at research stations and Agricultural College are trying to increase local food production through the greenhouse industry and if the minister could comment on that please.

 

MR. MACDONELL: Some of the work we've been doing with the Centre of Geographic Sciences is to try and map microclimates in areas where you might identify production for particular commodities. I guess it's certainly no secret around the work that comes out of the Nova Scotia Agricultural College and we've been working closely with Kentville Research Station, between the college and the Kentville Research Station on projects. We see the college as the main part of trying to advance agriculture into the future. You probably have been to Denhaan's greenhouse, I think about Denhaan's and Stodijk Greenhouses and a lot of what we know around greenhouse operations and for them to be efficient, that's getting pretty well nailed down, fuel cost is the big one. I see these operations moving to - certainly wood is one fuel, and how much is there a capacity for them to go with grass pellets or any other fuel but certainly to go with the cheapest fuel that you can.

 

Amazingly efficient operations and I think I did know what the capacity for Denhaan's to supply tomatoes and cucumbers for Sobeys for a long period, for a big part of their year and whether it's for the whole 12 months but it's significant. As a matter of fact almost to the point where you start to realize you wouldn't need very many of those types of operations before you could actually have operations that would supply food 12 months of the year. It's questionable of what other things seem to do well in those greenhouse operations. We certainly look to research from the college, hoping that the ACAI Centre, when we get it built, will help advance that. You know that old expression, from the gate to the plate, so that you go right from primary production to a value-added product that the consumer is buying to use in their house.

 

I don't want anybody to think that we don't intend and expect that the Nova Scotia Agricultural College, going well into the future, will be a major component of agricultural research in the future. Since we don't own the Kentville Research Station, but we have real concerns that it's available as well, I think that's why we've entered into this partnering. I think a couple of professors from the agricultural college have been doing research at the Kentville Research Station. We keep in quite close dialogue with the federal government on those issues. The other one, the Nappan Research Station, which is federal, we're thinking about how that might play a role in our grass-fed, grass-finish research as well. I'm not sure if I just prolonged an answer, but did I answer your question?

 

MR. GLAVINE: I think the realization that there are currently some successful, actually not projects, but farmers making a living through greenhouse and the potential now to look at others in light of the fact that I think it's becoming clearer everyday that while we may continue to tap into the California-Texas-Florida network of getting some of our food, the realization is coming about that we are going to have to move back to greater self-reliance. I mean, even in terms of large-scale farming to produce more of our food supply and probably educating Nova Scotians that eating what we do produce is part of a healthy diet. I think you've touched upon some of those areas there in your answer; obviously, one that does have a lot of potential for us to continue to try and advance.

 

We know that we are becoming more of a province with greater varieties of renewable energy. I think while our electrical energy costs are high, the whole area of greenhouse and producing and freezing more of our food, the manufacturing side, even on small-scale plants, is somewhat remote. We're just not competitive there. The area where we've lost substantial ground - of course, we've lost the hog industry - but the beef industry, we used to consume a much higher percentage of our own beef here than we currently are.

 

Outside of the pilot project at Cape John, are there any other initiatives and helps, considering the fact that if we would increase the amount of local beef, the employment opportunity, adding to our total provincial amount - now we're somewhere in the neighbourhood of about $20 million out of the $90 million spent on beef is Maritime grown. Are there any other initiatives to try to help us rebound in that sector?

 

MR. MACDONELL: Not yet. I'm not sure the member would be aware because I can't remember if we talked about this - I guess you could be aware and not talk to me about it. Two years ago was my first federal/provincial/territorial meeting at Nigara on the Lake and I asked the people there from CFIA if they would consider giving a designation to our provincially inspected abattoirs because one of the issues that was raised to me was the inability of these facilities to market outside the province.

 

In one case it wasn't so much that they wanted to market outside the province but it was that the retailer who purchased a product from the next process - let's say we have a provincial plant that kills beef, they sell it to a small retailer who smokes meat and those smoked meats go into Sobeys or into a large retailer that was setting standards for the companies that they do business with and one of the things they wanted was federal inspection. So what that did was tell the person who did the smoking that they had to get their beef from a federally inspected facility, which was going to take the small provincial inspected facility right out of the picture, even though that smoked meat really was unlikely to be traveling across the border into another province.

 

So we approached the CFIA to say, can you give some designation to our facilities that would allow them to sell outside the province because the quality of the product coming out of the facilities are as good as any federal facility. The difference would be that our provincial facility might have a six inch drain and the federal facility might have an eight inch drain or that ours has an eight foot ceiling and the federal one has a 10 foot ceiling but has nothing to do with the quality of the product. To my surprise they said, well we'll look at that.

 

In our last meeting in the winter, which was in Toronto, they announced this pilot; 19 facilities across the country. Two in Nova Scotia had applied to the program, Armstrong's was one and Northumberland in Brookside, was the other. That would allow them to actually access markets outside the province and they, probably alone, could nearly do our provincial institutions, or a lot of them, as far as provincial procurement. That is an initiative which, I really have to say, is the federal government, but we're helping to fund it. I think the federal government allowed for $5 million across the country, which is not a lot of money. I think the way it works for the plants is that we pay a third and the feds pay a third and the plant pays a third.

 

Now I'm not sure, since I haven't had the chance to speak with either of those facilities since they got started in this pilot, I think probably the first one is kind of an assessment of your facility and it may turn out in the end they'll decide they're not going to do this. The thing I said to the federal minister was, look if you're going to get into this infrastructure comparison, like you have to knock out a wall to bring it up to a federal standard, that isn't going to work. We really want you to concentrate on the food safety, food quality aspects of the product leaving the plant and he agreed. He said, look for us that's the issue. We're really hoping that both of these facilities will make the grade and be able to fit in under that program.

 

I'm thinking I already mentioned these, but the commodity association that I mentioned about where we had the remnants of Pork Nova Scotia and we've joined that with cattlemen and sheep producers to produce the red meat sector group and genetic enhancement, the program we just announced. We have been giving $25,000 - I'm trying to think of how long that's gone on, I know since I've been minister I think it has been two years - to the beef test station. I know I never mentioned the beef test station, but I think the other things I had already mentioned as far as other things you had asked about that we're doing for cattle production outside of Cape John and the grass finish.

 

MR. GLAVINE: Mr. Chairman, thank you for that update and hopefully, especially, the federal certification of a couple of small plants would really go a long way. I always hear from farmers that, is in fact, Armstrong's the next in the Valley that may run into trouble? Especially now that procuring hogs is a real issue for them. If that were to emerge, I know it could breathe some new life for them.

 

I was really pleased in the Speech from the Throne the announcement of an obesity strategy by the Department of Health and Wellness. I know there is a small desire for greater cross working with departments and I'm wondering if the Department of Agriculture has been solicited to assist and work with that initiative. We all know that eating good, healthy food and so forth is a pretty critical piece. From Statistics Canada, we know that we are below the national average in terms of fruits and vegetables in our diet. I'm just wondering, is there going to be something rolled out with the Department of Agriculture, which could also increase the consumption of local fruit and vegetables?

 

MR. MACDONELL: We do have someone from our department working on that committee. I'm not sure just how or into what depth they're at yet, but somebody from the Department of Agriculture is there.

 

MR. GLAVINE: I'm wondering at this stage, do you have some kind of sense of the snack food program in our schools, relating to that general topic of obesity. Has the Department of Agriculture set some targets, working on getting more of what you just talked about, whether it's slices of apples or slices of turnips into snack packs for students. I think the Department of Agriculture needs to be a wonderful, willing partner there with the Department of Education. I know the Department of Education has had some very good initiatives. Long before we had anything from the Department of Education and from school boards, some individual schools had already been working on this. I'm just wondering to what degree and what are a few specific things that the Department of Agriculture is doing to assist with that development? We all know that if we're going to reduce obesity and improve the health of Nova Scotians, the school is just a wonderful place to begin many changes.

 

MR. MACDONELL: I guess the fact that you and I both were teachers, we would know just what the possibilities there might be. We're very keen on being helpful in productive development side. After that, I'm not keen to be subsidizing food in schools, although we've had the milk program for some time. But, definitely, we'd really like to see kids having good, healthy snacks. We have a program that would help along the program development but I think that's pretty far down that road. There are people who are producing sliced products and whatever.

 

I was going to mention that we have a school garden program which is going to be initiated this Spring. Every school may not apply but to help educate students in where their foods comes from and some notion of what's healthy and hopefully drive that agenda, not just at the school but at home. When it comes to recycling or anything, the kids coming home from school seem to be the ones who are letting their parents know what they should be doing. Some of getting that product, even though there are companies now that produce it, to get it in the schools, I'm not sure if that's a logistic problem or a quantity problem. But anyway, I think certainly for us we'd be glad to help on the product development side if that's needed so that something that works better, lasts longer, is healthier. I'm hoping at some point that our grass-finish beef will be a product that will be in schools because of the health advantages of that over the grain finish.

 

We sent two people to Albany, New York, last year to a conference there for cattle producers. There were private schools and daycares there that would only have grass-finish beef for the kids. I thought, here's a real marketing opportunity if we were to think about procurement for our schools and said you can only have grass-finish beef. Usually when you're funding for institutions you're not funding the high-end, high-cost product but you still need a place for those cheaper cuts to go. The people who ran those schools had recognized that this was a healthier product and they were marketing their school on the idea that those kids would be fed this healthy product.

 

I don't think beyond what I've indicated about our interest to help develop the product that we're going to have a funding program to see any of the product get into vending machines or whatever.

MR. CHAIRMAN: Member, about eight minutes left in your time.

 

MR. GLAVINE: I asked the question because I looked at what was happening in British Columbia where they started off with 29 schools and a half dozen farmers providing directly to the schools. I know they have a little better growing season to assist that in the longer period of production. They started with 29 schools, this year's they're at about 1,030 schools and they have developed some central locations for farmers to take their product for redistribution. Using a lot of distribution network that was in place, using TRA or whatever, they were willing to be partners in doing this. I raised it because I think it has great potential around consumption of high quality, locally produced food and what I see, it's part of growing a local food economy. So that's why I did want to bring it up to see if the department was having any initiatives in that area.

 

MR. MACDONELL: I wonder if, at some point, we as a government can't just set that standard and say that the Department of Education says to the school boards, here's the range in which we want you to feed the students. Then it's a question of any particular entrepreneur's processes, or whatever, to meet those tenders. Certainly if we can't put in a tender to buy local, you try to put in the tender the conditions that you're pretty sure your local people can meet. Certainly those kinds of healthy snacks are a very good idea.

 

When you mentioned about the northeastern United States, I was curious about what their local regulations might be around buying local and if they have an interstate agreement, similar to what we have for an interprovincial one, that limited them, because it sounded like maybe they don't; they might have some more flexibility.

 

I think if we wanted to engage in something similar to what you've indicated, which I think is not a bad idea, we certainly wouldn't feel - as much as we would like to - we would feel good if we felt sure that the snacks were healthy snacks. Would you feel as good if they turned out to be coming from New Brunswick or Ontario? That would be an important component, as much as it could be local would be fine.

 

I do think there may be some capacity, and we have been looking quite closely at procurement and what it is that's possible. It may be possible to push that a little bit, as a requirement.

 

MR. GLAVINE: Mr. Chairman, I know my time is pretty limited here. A little bit of a different direction around buy local because we know that Select Nova Scotia has made a difference, there's no question.

 

I know there are probably some who have been looking at what will be some aspects of the next phase and so forth, especially around food consumption. I know that some of our local nurseries, and I'm not just talking about one in my area, a wonderful employer that has been challenged in the last few years, Springvale Nurseries, which have at least 40 summer positions there, 40 seasonal jobs. I'm wondering if the department has ever looked at buying a locally-grown shrub or tree and promoting our local nurseries. We know that the big box stores are viciously - that is the only word I can say - competitive during that season and their loyalties register on the barometer at zero because if they can get something for one cent cheaper out of Ontario or out of the U.S. then away they go.

 

I am just wondering if the department has ever thought about some kind of a campaign saying buy a locally-produced shrub, a rose for your garden or whatever. I am just interested in knowing if you come across anything in that area.

 

MR. MACDONELL: Interesting. There is always the debate about the government shouldn't be in this business or that business. When I think about it, we used to have an ornamental horticulture program at the NSAC. What we probably grow in terms of teaching students, if you're thinking about procurement for government's own issues like buying shrubs, we probably could supply ourselves just from our teaching class there. I also think about we used to have a tree-breeding centre in Debert. I'm someone who has a bit of a thing for indigenous species of trees. I plant yellow birches on my property and sugar maples as ornamentals. They're native and they've evolved with the area. Actually, I don't know if you've ever paid attention to a yellow birch, if it has a chance to grow in the open, but you'll walk up to it and say, I wonder what kind of tree this is because you'll be impressed with just how beautiful they can be.

 

I would say it's not a thought that I've had around the nursery side of it and the question about how to either give someone a leg-up that's competitive with somebody else. I think we may try to leave more of that with the private sector. I do recognize the issues around the large box stores and their nursery areas because generally, the Ontario season is so much ahead of ours and then as that season winds down, we're the place that all that other product winds down to, as a friend of mine who used to be in the greenhouse business said, and then we did that to Newfoundland. As our season was winding down and they were starting to get Spring a half hour later, Nova Scotia product would start to wind up in Newfoundland.

 

It is an issue. I think we can try - because we have the training program - to incent good horticultural practices and help people cut down to the best efficiencies. Beyond that in the marketplace, I'm not sure how much we can do.

 

MR. CHAIRMAN: That concludes the Liberal caucus time. The member for Kings North would like to ask some questions. We have 12 minutes remaining.

 

The honourable member for Kings North.

 

MR. JIM MORTON: Mr. Chairman, I know you've been answering some questions about the grass-fed beef program. It seems to me like a really interesting development and one worth pursuing. I was out for the last little bit. It's possible you may have responded to some of these questions. I'm kind of interested in both some of the directions and some of the technicalities of this, but are there grass-fed beef models that are being used elsewhere in the world that we've been able to look at to see where we should go from here?

 

MR. MACDONELL: Actually, yes, there are. When I mentioned about the conference in Albany, New York, there is a big interest in grass-finished beef in the northeastern United States; there has been for some time. I'm thinking that probably they have worked out some of the production, genetics; other details around that. I'm trying to think of the name - there is a name - for a farm or an operation I think in Scotland, if I'm not mistaken where this seems to be the initiative. I think there are models and we've been very interested to see what they do that's different in terms of, are they using a particular breed of cattle? I think generally the agreement is that this probably works best with what we call the old traditional British breeds, in particular Black Angus, but that wouldn't necessarily have to be the only one, so for carcasses that would finish smaller rather than larger. One of the things that we heard from Sobeys in one of our meetings was they were finding that - I think what we refer to as the continental breeds - they wanted a steak that was smaller. They were having such large steaks that Ms. Brown would say, look I don't want to buy the whole animal, so that type of thinking works well with the British breed types, although I think we heard the opposite thing from Superstore; they were looking for a bigger steak, not that I regard it as a mistake, but anyway.

 

AN HON. MEMBER: It is the Superstore.

 

MR. MACDONELL: Yeah right, supersize.

 

MR. MORTON: Do we know anything about - I guess I'm thinking as I ask this question - about what kinds of opportunities there might be within the existing agricultural industry, anything about optimum herd sizes for making grass-fed beef viable?

 

MR. MACDONELL: I don't think we have that number down. I think within the industry we can probably find people who would tell us if you were doing nothing else. I think the thing that I want to emphasize about this is that we're talking about finishing cattle. The industry in Nova Scotia - and there was good reason for this - by and large the industry in Nova Scotia was a cow/calf operation and quite often we would sell our feeders to Prince Edward Island. There was always a bit of conversation around a Maritime approach. We would be cow/calf operators; we would send those feeders to P.E.I., maybe New Brunswick, and they probably could go to Quebec or Ontario. Because of the potato industry in Prince Edward Island they had lots of excess potato waste, and they have a rotation where they were growing grains, so they had fair abundance of feed for finishing cattle. It seemed to work well. Now a lot of the waste material isn't available. They've gone to digesters and I think using that material to make energy and there's just not as much as there used to be for feed-lot operations.

 

As much as I've been talking about - I said our producers would not only have to be good cattlemen but they have to be very good grass farmers - but also we're talking about a change from being a cow/calf operation to a finishing operation so that's a whole new twist. We think there's some fair opportunity, I'm sure there are a few people around who could tell me, if you were doing nothing else but finishing cattle, here's the number you would need to go through that operation every year in order to make a reasonable living but I don't have a number for you, I'm thinking 250-plus.

 

MR. MORTON: So to make it profitable, it looks like it would be reasonably good size operation.

 

MR. MACDONELL: Yeah, we're thinking it would probably have to be a relatively good sized operation. Actually somebody mentioned to me one day that you could probably work off the farm and keep 200 cows and that's probably pretty doable if you were cow/calf. Once you move into a feeder operation - because if you had 250 cows and they have 250 calves then you're going to have 250 yearlings and then the question of beyond that time frame of when they would be finished. You're looking at - if you have 250 breeding cows that have calves every year, you're going to have a significant operation. By the time you finish 250 cattle at 18 months or whatever, you're going to be in a range of 1,000 head of cattle. Whether that - what I'm saying is reasonable and I shouldn't be questioning what I'm saying - so I'm thinking if the more you multiply that, if it turns out you needed 500 cows you can just see how that gets larger the more you go out. We probably have numbers that would indicate maybe an older model. That is part of this process that we want to crunch to say here's what that should look like in Nova Scotia.

 

MR. MORTON: You had mentioned a couple of retail outlets in your comments and I was also curious about the markets. I guess maybe part of my thought about this, I don't know if I've ever eaten just grass-fed beef, is it an acquired taste? Is that something we would have to prepare people for? Just any thoughts you have about markets for this product at this point.

 

MR. MACDONELL: Those are all good questions that I'm not sure I can answer. The breadth and depth of the market is a good question only because 90 per cent of what we're consuming now isn't from here. If everybody who ate grass-finished beef said I just can't eat one steak, I have to have three, it's so good. Then the question would be if you could sell every finished animal to the Nova Scotia market, what is the potential? In other words, if every person who was interested, if every possible piece of land that - would we only produce 50 per cent of what we consume? Would we produce 80 per cent of what we consume?

 

It's a question of what the entrance level is and the margins and if the money they would make is enough. Some people would say, I'm happy with that, I can make a living, do what I like to do and I'm fine and somebody else would say I wouldn't get up in the morning for that money. There are a number of questions around even if everybody loved it.

 

I hear conflicting analysis of what this grass-finished product is like. I really would like to try some and then if I like this and didn't like that, what's the difference in how that was finished, slaughtered? We're really hoping to set criteria and give it a brand. In order for it to get that brand, it's got to meet these points and all of those points are to take it to the place where you're going to like it. That's where we're going.

 

MR. MORTON: How much time do we have left?

 

MR. CHAIRMAN: You have approximately two minutes and a bit left.

 

MR. MORTON: I think I'd like to shift my questioning a little bit to another area that you've talked quite a bit about during estimates today and that's just about your evolving thinking around investment programs that the department has. I have heard and some other members have heard some concerns among farmers as they think about change, about what this may mean in terms of the future. Could you just comment a little bit on how your thinking has been evolving within the department and how you expect members of the agricultural community will be able to access those programs in the future?

 

MR. MACDONELL: I think the one we keep hearing about is Farm Investment Fund but the Farm Investment Fund is going to be changed in the sense, the name is going to be changed anyway. We intend to offer all of the services that are dealt with under the fund. The funding level basically is the same as last year so we haven't seen a cut. Actually, we've increased program funding if you consider Soil Amendment Program, Genetic Enhancement Program, $500,000 for the kick-off of the 10-year strategy.

 

What we're going to do is arrange that funding the way it used to be allocated by a particular program fund and we're going to arrange it by themes. You have your business investment theme; you have your environmental theme. I think there were three other programs, farm investment was one, that people would apply to that program for a particular theme, an environmental component in that program. So we decided that because we kept getting this cross application - this fund has an environmental component and this fund has an environmental component - well, we said, why don't we eliminate the names and just apply to the environmental component and have a program for that, and that's really where we're going.

 

MR. CHAIRMAN: Thank you, minister. We have been four hours and seven minutes since we started with a seven-minute tea break and that concludes a very informative morning and first part of the afternoon. I thank the minister and the staff of the Department of Agriculture and the MLAs all present here today for a very good agriculture day. Thank you.

 

Shall Resolution E1 stand?

 

Resolution E1 stands.

 

[The subcommittee adjourned at 1:50 p.m.]