Mr. Chairperson (Ben Sveinson): Order, please. Will the Committee of Supply please come to order. This section of the Committee of Supply will be considering the Estimates of the Department of Agriculture.

Does the honourable Minister of Agriculture have an opening statement?

Hon. Harry Enns (Minister of Agriculture): Mr. Chairman, I do have a statement.

I would like to take perhaps somewhat longer to describe the agricultural scene for the record, for the journal, and also for the critic of the department, the member for Swan River (Ms. Wowchuk). It is always a pleasure to introduce the Estimates for the Department of Agriculture, the department of government which is, of course, the most important department of all government activity, agriculture. Without agriculture and the food that we produce, we would not be arguing about judges and justice systems or hospitals or schools. We would all be somewhere in the bush looking for our nuts and berries that we could gather enough of to feed our respective families.

Surprisingly few agricultural people, less than 3 percent of our population, do a marvellous job in providing a safe, dependable supply of food that all of us can enjoy. So it is extremely important, in my opinion, that all of us, whenever we speak in a public forum, remind those listening of the importance of agriculture, the contribution that agriculture makes to our overall society.

I would like to briefly comment on the farm income situation. During the past 12 months, certain commodity areas within our agriculture industry suffered the effects of a serious downturn in prices. In part, these price declines forced us to recognize our dependence on the global economic community. Agricultural export subsidies by trading nations negatively impacted the province's grain producers. Increased American hog production during 1998 and reduced slaughter capacity led to lower hog prices, adversely affecting our hog producers. These international trends had a major adverse impact on the farm income situation within the province's grain and hog sectors. Although not by any means total, they are a very significant portion of the overall farm activity.

For several years, the grain producers have been faced with the demise of the Western Grain Transportation Act or the Crow. Many of these producers were motivated to adapt accordingly. High wheat prices in '95-96 concealed the magnitude of the cost increase brought on by the elimination of the transportation subsidy, diminishing the urgency of adjusting to a new economic reality. But, simply speaking, the economics of grain production have significantly changed. Producers can no longer continue to operate as they did prior to grain transportation reforms without being very negatively impacted. While the loss of the Crow benefit has made wheat, barley and other low-value, high-volume crops less economic to produce for export, alternative and new opportunities for value-added production have become more economic to undertake, and our farmers are busy doing just that.

In our pork industry, we have experienced, of course, an extremely difficult time within the last 12 months, but I am very pleased to report that the current recovery in prices is good news for the future. In spite of the downturn in the hog prices, the pace of new hog barn construction continues to be strong. This strong pace reflects our pork sector's long-term confidence in future market opportunities as the world hog markets continue to expand. Manitoba's pork industry has undergone very rapid and dramatic growth, nearly doubling production over the last decade, with an increase of almost 60 percent in the last five years. The province exported pork to some 37 countries in 1998 at a value of over $200 million, representing a rise of 27 percent from a year earlier, and that despite what we are all aware of: the discussions of the Asian slowdown, the Asian flu. A lot of our export is to Japan; nonetheless we recorded a 27 percent increase in pork exports last year.

The expansion in this sector can be attributed to the initiative, commitments, skills of the province's pork producers and the collaborative spirit evident in the industry. With construction well underway at the Maple Leaf Foods plant in Brandon and, of course, the recently expanded state-of-the-art Schneider's processing plant here in St. Boniface, and most recently the expansion of the Springhill plant in Neepawa, Manitoba continues to build on its foundation as a world-class pork producer and processor.

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Some comments on our safety nets. The province's Crop Insurance Program administered by the Manitoba Crop Insurance Corporation constitutes a critical component within our broad safety net system. The provincially based program, which is jointly funded by the federal and provincial governments, provides farmers with protection against financial losses incurred from natural causes. Currently, more than 80 percent of Manitoba's crop land is insured by the corporation. This percentage represents the highest acreage proportion covered by crop insurance in Canada. The Manitoba government's annual funding contribution to the Crop Insurance Corporation premiums and related expenditures has ranged from $30 million to $36 million during the last three years. It varies somewhat in terms of the number of contracts and crops covered, but that is the range of the Manitoba portion of crop insurance cost, $30 million to $36 million.

We currently insure 40 different crops and are constantly adding to the mix of crops, and I expect that will continue as more and more diversified crops will be produced on our farmland. This broad commodity coverage encourages crop diversification within the province, and we will continue to make improvements to such coverage in the years ahead. I make a note here that it certainly would have been a great help to us, with the benefit of hindsight, had we instituted into the core program unseeded acreage coverage. Saskatchewan has a program that does provide for a modest $25-an-acre coverage for unseeded acreage. It is, of course, available in Manitoba, too, both the $25 and the $50 coverage, but I regret to report only a relatively small number of contract holders seek that coverage.

The experience that we are experiencing currently in the province, it is my will and it will be my intention to consider building unseeded acreage coverage into the core program. I believe there would be a reception to that by producers that may not have been there a few years past when some areas, such as the one now plagued with water, was chronically in a drought situation and saw little reason to add any premium cost for unseeded acreage.

Just a few words on the Manitoba Farm Mediation Board. It has understandably become more active in this last year with the crash in hog prices and the continuing poor commodity prices, and of course now the difficulties faced by so many of our producers. This is a significant and important group of Manitoba citizens with good general broad farm experience that help many, many of our families who find themselves in difficulty.

The aim of the Mediation Board is to try to bring the parties together, to try to help rearrange financing. They have a modest budget of their own and occasionally can provide some modest support, $5,000, $6,000 or $7,000, that will help maintain a family on their farm and keep debtors from their doorstep. I have a great deal of respect for this group and their members. It is a small committee, I will not try to name them all, but chaired by a Mr. Harrison, I believe it is, and about five or six farm members of good standing throughout the province who do, in the main, a very important job.

I would like to speak a little bit about the Net Income Stabilization Account. The Net Income Stabilization Account, or NISA as it is called, is a major program tailored to serve the needs of participating producers during difficult times of commodity price downturns, which has most recently been experienced in the grain and the hog industry. This program, while it has its critics is, I must inform the honourable member, generally very well supported by producers. It is, of course, a program that allows the farmer to, in an orderly way, set aside some of his sales, some of his profits in a good year to be matched by provincial and federal sharing and then drawn down at times of need. That program just recently has come under some considerable scrutiny as we try to amend it, to make it a little more flexible.

Each year, Manitoba producers can deposit money into NISA and receive a maximum matched contribution from federal and provincial governments. All agricultural commodities, with the exception of inedible horticulture and supply-managed commodities, are eligible under this program. About 90 percent of Manitoba producers are participating in NISA, accruing almost approximately $400 million in their accounts. Mr. Chairman, it is important to note that is a significant amount of money that is in the, roughly speaking, 19,000 NISA holders' accounts, $400 million.

With regard to the producers who do participate on average, close to 20 percent of gross sales are on their account. NISA payments can now be delivered more timely and when needed. Participants no longer need to wait until the following tax year to apply for withdrawals. The introduction of interim withdrawals enables farmers to receive funds closer to the time when it is determined that they are needed, and our government pressed for more flexibility in the NISA withdrawal rules to ensure timely access to their NISA funds.

I am pleased to note that just as of yesterday Ottawa has announced that it has responded positively to these requests, and those announcements were made in Brandon. My friend and colleague the honourable member for Swan River (Ms. Wowchuk) was also present during those announcements. NISA is available to participating producers by making available an influx of cash during the income downturns. This program provides income safety net protection for the majority of grain and hog producers who are facing financial difficulties at this time.

Some new initiatives with respect to the farm income situation. During this time of financial duress faced by a number of producers, the Manitoba government was prepared to launch several new initiatives. The honourable member will recall that as we were getting into this developing crisis, particularly in hogs but also the continuing poor commodity prices and governments were moving rather slowly to the development of the AIDA program, there was an urgent need required for some immediate assistance, and I was pleased to have the Manitoba Agricultural Credit Corporation launch what we call a Producer Recovery Program on December 22, 1998. This new initiative was aimed at helping farmers in financial difficulty caused by the current worldwide decline in commodity prices. Under this program, producers can offset working capital deficits and settle outstanding accounts payable.

On June 2, that program was enhanced from the original allocation of $25 million to $45 million, an increase of $20 million. Individual farmers are eligible for loans of up to $50,000, while partnerships and corporations with farming operations may borrow up to $100,000. To date, the uptake has been significant, and since its launching date in December, as of today, we have some $27.7 million in loans approved, and of this amount, $24.1 million has actually flowed as cash flow. That is a significant injection of cash into the cash-strapped farm economy during this relatively short period of time from mid-December to June.

I think, Mr. Chairman, even you would be impressed by that kind of performance on the part of my loans officers in Brandon.

Mr. Chairperson: Yes, very impressed.

Mr. Enns: Applications for another $4.9 million in assistance are currently being processed. The demand for assistance under this program has been strong. Applications for loans under this issue will continue to be available until July 31 of this year.

Then we have the Agricultural Income Disaster Assistance program or AIDA that is much in the news these days. In December of '98, the federal government announced the $900-million Agricultural Income Disaster Assistance program to deal with the current financial crisis occurring on some farms. In response to the announcement, the Manitoba government, in consultation with producers, examined the effectiveness of this initiative in meeting the particular needs of the province. While we continue to express some serious concerns, and some of those concerns are becoming all too apparent as we try to apply the program to the current income problems and disaster problems that farmers are facing, we nonetheless felt it mandatory or important to join the program, and that is what we did some time in late January.

To enable producers to receive full benefits under the AIDA program, the Manitoba government agreed to participate at 40 percent of the program cost. Nevertheless, we will continue to press Ottawa to recognize and address the particular needs of Manitoba farmers, and we are doing that right now. The essence of the AIDA program is to provide assistance to the farmer when his income declines by more than 30 percent of the last three years' running average.

At this time, I would like to comment just briefly on the extremely wet conditions that we have not just in western Manitoba, although that is certainly the area that is most seriously impacted, but there are regrettable areas outside of what we call the southwest–Neepawa, Gladstone, up into the Roblin-Russell/Grandview area. I believe that there are even some problems in the southeastern part of the province that they have had extreme difficulty in getting their crop in the field. Many producers are deeply concerned about their ability to get their crop into the ground this year. Manitoba Agriculture staff are working with western farm families whose land is experiencing excessive wet soil conditions. Our staff is providing them with information and advice on available options under these conditions, such as on agronomic practices, weed control, program coverage.

We have recently distributed our newsletter in the region listing our available services and resources for farm families coping with financial stress. Further newsletters are being planned. These will cover program, livestock feed, agronomic and other resource information. There are two specific offices set up, one in Neepawa and one in Melita, I believe, that have kind of pulled together the different emergency support efforts of government under one roof, one-stop shopping kind of for disaster assistance, and all our ag reps are aware of these offices. All our ag reps are working together in co-ordinating these efforts, and I understand that although it is not lessening the scale of the problem, it is certainly making it a little more readily available, the kind of government information that is required under these circumstances.

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I remind all of us that we are rapidly approaching the deadline for full coverage on crop insurance. Spring seeding has been extended by five days. The federal government has co-operated on this deadline extension in order to provide the same opportunity to western area farmers as received by the Red River Valley producers during the '97 flood.

Producers in western Manitoba may also be eligible for Disaster Financial Assistance under the DFA program. That is a program that I just want to spend a moment, that it is extremely important that we address and that we focus on other costs related to agriculture that, for instance, were responded to in the Red River Valley flood and have yet to have received any firm indication from Ottawa that it is their willingness or that they are prepared to provide the same level of support.

I mention three programs specifically. The Custom Seeding Program, which I felt I had to announce last week if it were to have any impact in trying to make full use of the better weather that we are currently enjoying. I announced without knowing for certain that the federal government would be supporting that. It was in '97 fully covered by the federal government, 100 percent cost of that program as administered by PFRA. We have another program that we refer to as the JERI program that compensated for some of the input costs, fertilizer losses that were put on them. Members of the committee must recognize that in many instances farmers have applied $25, $30, $35 worth of fertilizer on their fields last fall or early this spring only to see them totally wasted, washed away in these heavy rains and of course totally, a 100 percent loss if no crop is planted at all. All they are doing is nurturing humongous weed growth that is going to cause a farmer additional expense to try to control. So I am seeking the opposition party's support in my appeal to Ottawa to fully provide the kind of assistance to all farmers in need in 1999 as was done during the Red River Valley flood in '97.

Mr. Chairman, I know there are a number of other issues that I should relate to, and I always feel under some pressure because my excellent staff who are sitting back there have prepared copious notes for me that describe in beautiful prose and with a great deal of information the full ramifications and status of agriculture as it is today, but I know that the honourable member for Swan River (Ms. Wowchuk) really wants to get at some specific questions, and I will cease and desist my presentation at this time and welcome my critic the honourable member for Swan River.

Mr. Chairperson: We thank the Minister of Agriculture for those comments. Does the official opposition critic, the honourable member for Swan River, have an opening statement or comments?

Ms. Rosann Wowchuk (Swan River): Mr. Chairman, I just would like to make a few comments. The minister talked about the importance of the department and the importance of the industry, and I think many times many people in Manitoba and in fact in other parts of the country overlook the importance of agriculture and its importance in the economy. We can see that happening when we see the small part of the population that participates in agriculture. Many people sometimes forget that the job that they are doing, although not directly involved in farming, is a spin-off job from farming. We saw very clearly just in this last couple of weeks the importance of agriculture. Although it is not one you like to see, but we see in the southwest part of the province where the business community and the Chambers of Commerce are concerned in small towns, and in fact the City of Brandon is talking about the impacts that they are going to feel because of the decline in the agriculture economy in that part of the province.

I feel very badly for those people who are going to suffer along with the farmers because we all know that when a farmer has money in his pockets, it does not stay there very long; he reinvests it either back in land or in equipment or money is spent on the family, and it spins through the community many, many times. The loss of revenue that we are going to see in this province, if that million-plus acres does not get seeded is going to be felt throughout the province. So sometimes it takes a situation that has developed as we have in the southwest part of the province to make other people realize how important the agriculture industry is, and it is not only the heavy rains. In this particular situation, over the last couple of years, we have seen a decline in commodity prices. Farmers are making do with the equipment that they have, and I believe last winter we saw layoffs right here in Winnipeg where farm machinery dealerships were not having the sales that they had, were dissipating and their employees had to be laid off.

It is still a very important industry in this province and certainly has seen some changes as we move away from the Crow and move into a new era where grain prices are not what they used to be and we move into new crops. It is going to be a challenging time for the farming community and those in rural Manitoba, and people in the industry look to the Department of Agriculture for support and for the information needed as they take on the challenges of new variety crops and move into different areas. It is very important that we have a strong agriculture staff that is there in the regions to provide the farming community with the information that we need. That is one of the areas where we have some concern with the decline in supports for the farming community within the Department of Agriculture.

Certainly the hog industry is one that has grown and one that seems to be having less challenges than it did a few years ago. I hope that we can see that industry grow in a sustainable way, and when it is done properly and when there is proper consultation, it has the support of communities. But there are areas where we still have work to do in that area.

I believe the minister talked about the crop insurance, and certainly the issue of unseeded acreage is one that has had lots of discussion over the last little while and one that farmers have not participated in. Basically, farmers feel that the package that is there right now is not adequate, so I hope that we will see changes made to the program when the next round of negotiations take place to improve our crop insurance.

One of the hardest hit in this time of low commodity price, or disasters because of the weather, are the young farmers. They are the ones who the minister talks about NISA and AIDA, but those are the people who have a high debt load, have very little money to spare, have no money in NISA. In fact, if you look at some of those accounts, the minister is well aware that many of those people, if they have the ability to put money in, they put it in and take it out just about as quickly so that they can pay off some of their debts that they are carrying.

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Certainly AIDA, as well, a program that we knew for a long time that was needed. In fact, I wrote a letter to the minister back in September of last year asking him to look at the situation that farmers were facing and the need for the provincial government to address it, look for ways to support the farming community. We had hoped that the package that would be developed would be a much better package than it is and as people prepare to make their application, it is proven that there are many people who are not going to qualify. Even with the announcements yesterday of lowering the numbers where the program could trigger in, there are still many farmers, because of the guidelines that AIDA is run under, who will not be able to access money. So certainly there are challenges there.

The weather conditions are certainly a challenge to many people, those in particular in the southwest part of the province but in others as well. In the Parklands there are several areas where seeding will not take place this year. The weather that we are having right now is certainly helpful, but there will still be some that will not be able to complete their seeding. Along with that are the challenges that we are going to face, particularly in, again, the southwest part of the province where it is not so much whether you are going to be able to seed or not but whether or not you are going to be able to get those weeds under control that are going to be the big challenge.

One of the areas that I think that the government has not addressed properly is certainly supports for families who are in very stressful situations. We have called on the government many times to reinstate the rural stress line. We have asked that from the Minister of Health (Mr. Stefanson). I would ask the Minister of Agriculture to recognize the impacts on the families, to recognize the difficulties these families are facing and put in place that service. The cost of that service in the whole scheme of things is not very high. When you think that there might be a family who needs some support to get them through a very difficult financial and emotional situation, we had hoped that the government would recognize that as an important service.

I recall that when the Red River Valley was flooding, I believe the line–no, the line was not in place at that time, but we had called for it then. But at the time the government cancelled the line, the then Minister of Health said, well, we do not need the line anymore because commodity prices have improved and things are looking much better, so we do not need these kind of services.

Well, things are not looking good in the rural community. There is a tremendous amount of emotional and financial stress. This is one of the services that I very much would like to see the government put back in place and offer that service to people in the farming community. I do not think because people live in rural Manitoba they should have lesser services than people in urban centres. By that I do not mean every service should be out there, but you should be able to access those services. That is not happening right now.

In all of this situation, we have called for the people who are suffering this year to be treated the same way as the people in the Red River Valley were treated. That is not happening. The programs came about much more quickly during the Red River flood. The Leader of the Opposition (Mr. Doer) today said in the House, you know, we do not want to be cynical, but was part of the reason that money flowed so quickly during that situation because there was a federal election. Well, I do not think that that is fair that people should have to wait for a federal election.

We would support the government in every way we can to ensure that we have disaster assistance programs implemented for people who are suffering and in this disastrous situation to be treated the same as those in the Red River Valley, whether it is costs for fertilizer, whether it is costs for custom seeding, whether it is costs for replacing chemicals or whether it is feed for livestock. Those kinds of things, we should have a policy, and those kind of costs, people should be treated the same way as they were in the previous floods and, I really think, floods or any kind of disaster. There should be a plan laid out that we should not have to negotiate each time something happens and federal ministers have to make accusations that provincial governments have not made application for funds when in fact those have been made. People should not be pawns in these kinds of situations. Those are the areas, Mr. Chairman.

Certainly, when we look at changes that have been made, I have questions to ask about the AIDA program and the issue of research and the direction that we are moving on in research and the supports that the government is prepared to offer to the farming community. We have some under the area of changes to crop insurance and agriculture Crown lands and a few of those areas. I understand that, given the time we are at in the whole Estimate process, there is not going to be that much time that we can address these, but I am sure there are some questions that we may put on the record that we can answers from the minister after.

Mr. Enns: If I could be of some help, I see my officials from both Manitoba Crop Insurance Corporation and Manitoba Agricultural Credit Corporation are here. If we would like to spend a few minutes, any questions that you have with respect to those two Crowns, I would be, at the willingness of the Chair, ready to treat them separately.

Ms. Wowchuk: There are a few questions under crop insurance that we could do right now. I guess I would want to know where we would get into the discussion on AIDA. That would be under policy. That would not be under–[interjection] That would not be under either of those departments–

Mr. Enns: If I might, I might suggest, let us go to Crop Insurance. Could we call on Crop Insurance officials to come and join me?

Mr. Chairperson: Just wait there for a minute, please. Under the practice, debate of Minister's Salary is traditionally the last item considered for the Estimates of the department. Accordingly, we shall defer consideration of this item and now proceed with consideration of the next line. Before we do that, we invite the minister's staff to join us at the table.

We ask that the minister introduce his staff present.

Mr. Enns: With me, of course, is Don Zasada, the deputy minister of Agriculture. I am pleased to have Mr. Neil Hamilton, the general manager, Manitoba Crop Insurance Corporation, and Mr. Jim Lewis, who is the director of Finance. He is the gentleman that has joined us from their Portage la Prairie head office this afternoon and would be pleased to try to respond to any question that you may have.

Mr. Chairperson: I take it that it is the will of the committee to have questions that are quite far-ranging. We are going to go under Crop Insurance right now. We thank the minister. We can have a general discussion then.

Ms. Wowchuk: I thank the minister for bringing his staff in to deal with this particular issue at this time, one that is very timely, given the situation that we are facing. The first question I would like to ask is that when the last round of negotiations on crop insurance took place, there was a decision obviously made to not include unseeded acreage coverage. The program that we have now in Manitoba requires that you have all of your crop insured before you have the unseeded acreage covered. My understanding is there is very little participation in the unseeded acreage coverage because farmers are just not satisfied with it.

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Can the minister indicate how it came about that we have the kind of crop insurance, unseeded acreage coverage that we have in this province versus Saskatchewan having one that allows for a $25-an-acre payment for unseeded acreage. How did we come to that point? Why was a decision made not to have that kind of coverage here in Manitoba? Did we get something else? How did that come about?

Mr. Enns: There are different pluses and minuses, I suppose you can say, to the crop insurance programs as they are administered across the land. I have always taken a position that I am extremely proud of the program that we have over the years put together, certainly my predecessors and other ministers that have worked with the corporation over the years. That is best attested to by the simple fact that we have the distinction of having the highest percentage of our crop land under crop insurance coverage, considerably higher, for instance, than Saskatchewan.

The question that the honourable member has asked is it has been an optional program. It has not been part of a core program or universal program. As I suggested in my opening comments, with the benefit of hindsight I wish I would have made it a universal program a year or two ago. We have about 175,000 acres that are covered for unseeded acreage, but you have to recall, that is a relatively small amount out of the 11-12 million acres that we farm and about the 7 million or 8 million acres that Crop Insurance insures, involving some 250 producers out of the 11,000 contract holders.

A $50-per-acre coverage can be purchased for a modest 88 cents. That kind of coverage, had that been in place today, would go a long way in reducing some of the stress and some of the frustration and some of the concern that is out there in the agriculture community right now. It is my intention and it is my hope that the member will support me to make that recommendation to my colleagues for next crop years that we, in fact, do make it part of the core program.

Ms. Wowchuk: Yesterday the federal minister indicated that all changes that were made to crop insurance were the decision of the provincial government, or the provincial government had to take the lead on any changes that were being made to crop insurance. Can the minister indicate what the process is here? If we are going to get this kind of change, it certainly requires a federal commitment. So is this something that has to be negotiated? Are there negotiations each year that you have the opportunity to make these changes, or do you make negotiations that last over a few years, at that time, then those programs carry through?

Mr. Enns: I just wanted to indicate that Mr. Craig Lee, our assistant policy director, has joined us at the table.

I was kind of pleased to note, and I know it will come as news to the gentlemen from the Manitoba Crop Insurance, including my deputy minister, I might add, that the federal minister did indeed yesterday indicate that I and the provinces can do anything we want with crop insurance at any time. I do not know whether that, in fact, has been your experience, Mr. General Manager. I suspect we do have to consult with Ottawa, inasmuch as that they are senior partners in the program. But in the main, these changes are discussed. We are constantly adding the number of crops that are being covered, changing some of the conditions of them. We have made some specific amendments to some of the forage coverage as of late to reflect the growing interest in forage crops, making common seed, I think, insurable.

I call it a more friendly insurance program to the edible bean sector, again reflecting the expansion of that crop in our cropping area. Virtually every year there are some amendments to The Crop Insurance Act, which we discuss with our federal partners. Generally we come to an agreement and proceed. This bringing the unseeded acreage coverage would simply be an addendum to the program. I have already talked about the wisdom of doing that with the federal minister, and I would be certain that there would be no serious difficulties. There are some premium implications, of course, for both the federal government and the provincial government, but it is my firm desire to have that as part of our core program for the coming crop.

Ms. Wowchuk: The program that we have now, the unseeded acreage program that we have, is $50 coverage for 88 cents per acre, and an individual has to insure all of their land in order to get that kind of coverage. Am I right on that?

Mr. Enns: Yes. I think the corporation will agree with me that we will have to take a hard look at some of the policies in place with respect to the unseeded acreage. We have, for instance, one of the stipulations that it must be at least a 10-acre block, and as the honourable member knows and I know, flying over much of the land that is in current trouble there, there are lots of places where you do not get that 10-acre block. I would like to examine with the corporation whether or not–and I appreciate all of these have premium presumptions attached to them–a fairly flat out–perhaps based more like on hail insurance-type of an unseeded acreage. If a farmer has 50 acres that he has not seeded or 150 acres unseeded, that he has some coverage for it.

Ms. Wowchuk: Can the minister indicate has his staff looked at the program in Saskatchewan where they do have an unseeded acreage policy and what the cost implications there are for the producer? Is there a fairly substantial increase? What would be the comparison of their rate of insurance versus ours? Do you anticipate that moving to this unseeded acreage will have a fairly high increase in premiums?

Mr. Enns: Our general manager informs me that, in fact, if we were to make it universal on all of the 8,000 acres that we insure, it actually makes the already modest premium quite a bit less because of its application to 8,000 acres. In fact, I saw some data–and I am looking to the general manager who I am sitting far enough away he cannot kick me, but he has kind of beady eyes that he can focus on if I am out of line–that it could come down as low as 35 or 40 cents at $50 an acreage coverage if it, in fact, were universal.

So I think, with the Minister of Finance (Mr. Gilleshammer) listening and at the table as well, it will take the co-operation, of course, of government to introduce what I call a relatively modest enhancement of crop insurance but one that would have provided us with tremendous safety net protection at this time. We would not be going hat in hand to federal governments or to our governments. There would be for a significant number of our producers a kind of support that they badly need.

Ms. Wowchuk: Can the minister indicate whether he envisions this being an option for people who are taking crop insurance, or would you see this as a compulsory part? If you are taking crop insurance, then this unseeded acreage would be part of the package.

Mr. Enns: It is an option now, and it has not been widely taken up on. So obviously if it would be my intention to make it mandatory, compulsory, what I call part of the core program.

Ms. Wowchuk: Mr. Chairman, I just want to say that I believe that if the price is more reasonable than what it is now and if there are some changes made to the requirements right now, particularly the size of areas that are unseeded, and if you make some of those changes, I think that it would be very much appreciated. I think that given the year that we have had this year–and I understand that people in the southwest part of the province prior to this did not see an interest in having unseeded acreage insurance. Given the climate that they are normally used to, which is a much drier area and they are normally more concerned about drought than they are about moisture, I can understand why they would not have been that interested. But I believe that if there are going to be changes made to the program, people will receive it much better and in particular if some of those changes are being made.

I wanted to ask the minister, as well in Crop Insurance, there are many new crops that are being grown right now as farmers change their practices. Some of them have been added. The minister talked about changing the program for beans, and that is certainly an important crop in some parts of the province.

Are there requests from farmers for new crops that are not being insured for under Crop Insurance right now? One of the crops that I think about in particular is the interest that we have in hemp. That is one of the crops that I would like to know. What kind of consideration, and is there any coverage on that?

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Mr. Enns: Mr. Chairman, I am advised that this is an ongoing process at the corporation. They are constantly meeting with different provincial organizations that will bring to the attention of the corporation new varieties that they are starting to grow in the province. There are some forages that currently are not being covered, but again the corporation keeps looking at them. Certainly commercial hemp is a crop that producers are showing a considerable amount of interest in, in different parts of the province, and I will be asking the corporation to look at that crop. I note, by the way, I think Ontario, who has had a somewhat longer history of growing hemp, their crop insurance program provides some coverage.

So it is a question of getting some of the raw data that enables the actuarials to put together a program, strike an appropriate premium structure. But there is certainly a willingness on the part of both our federal partners and the provincial partners to insure as many or preferably all of the crops that we grow. Crop Insurance, and I call it our basic Enhanced Crop Insurance, is by far the most significant important element of our safety net programs. I know there are other portions to the safety net programs, like NISA and like AIDA now, but for me at least basic crop insurance still represents the central core of our safety net program.

Ms. Wowchuk: Mr. Chairman, a few days ago the minister announced the custom seeding that was going to be offered. Will that be administered through Crop Insurance, or who is going to be doing the administration on monitoring the Custom Seeding Program that has been announced? If the minister can also indicate, I asked a question in the House today about what was being covered, because when we were in Brandon yesterday I had two farmers talk to me about this program. They had indicated that it was not spelled out clearly as to what was being covered. They did not know whether it was just custom seeding or whether it was soil preparation that was being covered. The minister indicated in the House today that it is everything related to seeding. I wonder whether that information is available at Ag offices, because that certainly was not the message that the two producers that I talked to yesterday were talking about. The other question they had asked was whether it was going to be retroactive. I did not think the program could be retroactive from the announcement, because it just did not make any sense.

How did that information get out, and is it seed preparation? If you look at this and what I have here and the information that producers had, they are under the impression that it is hiring the seed drill. If you look at some of those fields that need to be seeded, there is a lot more than a seed drill that has to go into them before anything can be done there.

Mr. Enns: Mr. Chairman, I seek the honourable member's assistance in spreading the word that it is anything that leads to seeding: seed preparation, it could be an application of spray, of Roundup under some of these circumstances. But that is done within that time frame that leads to seeding.

Information is being finalized and sent to various Ag rep offices. The second question is that I will be calling on the Manitoba Crop Insurance Corporation people to administer the program. They have the data, and they are the agency that is best equipped to verify what the level of unseeded acreage at the end of the day is. Many of these people are their clients, their customers, who have a long history with the corporation. The corporation knows precisely that this farm normally seeds 3,000 acres or 2,000 acres, and if they get a report in from them that they only have 300 acres seeded, it is this corporation that can provide us with those kinds of basic figures upon which payment will be made.

Ms. Wowchuk: Can the minister indicate then what is the process? Is it submitting your bills and an inspection? Will it require Crop Insurance inspection, or is it just sending in their bills?

There must be some monitoring and checking as to when the work took place. I guess if somebody is custom seeding for you, you should have bills from them, but is there also monitoring that is going to be done by Crop Insurance?

Mr. Enns: Mr. Chairman, I am advised that by June 30, all farmers have to provide a seeded acreage report. All they have to do on that seeded acreage report that they normally send in to the corporation is indicate that in this year they have had to avail themselves of some custom seeding. I have seen the form, a simple form from Crop Insurance that indicates the amount of custom seeding supplied with some raw data of receipts and bills of the custom seeder having done this work, X number of acres. Based on that information, the payment will be made.

I have asked the corporation; I have asked my staff to keep it as straightforward and as simple as possible. I do not want to frustrate my farmers any more with undue paperwork and more forms, and I believe they have achieved it. I have seen the actual form. In fact, I will show the honourable member. It is just a simple form that indicates the crop seedage, spring wheat or canola, acreage seeded.

An Honourable Member: No requirement for receipts?

Mr. Enns: Well, there is a requirement for receipts, and if there is a reason for a call back or a check on the part of a Crop Insurance agent or Ag rep office, although it would be essentially Crop Insurance people that would be doing that, we will do that, but in other words pretty straightforward.

Ms. Wowchuk: Mr. Chairman, the government has made this decision on their own without federal support on it, and basically I guess because you could not wait for the federal government to make any announcements. Can the minister indicate whether he anticipates that this will be covered under the disaster assistance funding, or is this program going to be drained out of the AIDA package? Where does the minister plan to take this money from?

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Mr. Enns: The honourable member is asking the appropriate questions. There is an inclination, I gather, looking to my deputy ministers and policy advisers, that the current position of the federal minister is to draw as much of this out of the AIDA or AIDA-related program, that it is his belief that the AIDA program should be the one and only kind of whole farm support program.

I cannot answer the honourable member accurately as to how this will play out. What I can answer, and I seek her support, is that 1997 was not that long ago, and people do not require much of a memory to know precisely the kind of agricultural support programs that were available to farmers in the Red River Valley. I and my Premier (Mr. Filmon), and I am sure the honourable member speaking on behalf of her party, we have all made the statements that we want to treat our farmers equitably. If programs of a particular nature were available in '97, they ought to be available in '99 under these circumstances.

Just to be clear on the record, this particular program was a PFRA-administered program at 100 percent and picked up 100 percent, federal government, the Custom Seeding Program in '97. Under that program, some 930-odd thousand dollars were actually spent, just under a million dollars. Not all that much custom seeding really took place, although there was a fair bit. Our department's best estimate is that–and that is what I have authority for from my Treasury Board–upwards to 500,000 acres might be custom seeded under these circumstances, and at $10 an acre it makes that a $5-million program.

Certainly my Minister of Finance (Mr. Gilleshammer), when I announced the program without the federal government as a partner, I am anticipating that we can eventually have the federal government as a partner in that program.

Ms. Wowchuk: I certainly hope that the federal government will be a partner. If it was paid in '97 under a program through PFRA, I would see no reason why we could not have that kind of support now.

Mr. Enns: I might have to seek the honourable member's support in having you convince your federal colleagues to take their mind out of kicking God out of the Constitution and concentrate on the farmers' needs here, you know, and get the federal group together again. Seriously, the current government will need to be reminded, and it is a federal issue, that equity is a very important issue in this issue. I would not like to say, as her Leader of the Opposition (Mr. Doer) mused this afternoon in Question Period, that surely we do not fashion programs just because a party or a government is in the midst of an election.

Ms. Wowchuk: I want the minister to know that our federal caucus has raised this issue several times in the House of Commons and is very supportive of the farm community and feels that this should be supported.

The minister talked about $5 million that he anticipates this costs, and the minister talked about the money coming out of the AIDA if someone else does not pick it up. Does the minister then mean that the provincial contribution to the AIDA package on the other side would be reduced by $5 million to cover this off, or is it somewhere else that we are expecting the money to come from to cover this off?

Mr. Enns: The federal minister has advised that any component of these additional programs or any programs that the province initiates that bring down the call on the federal portion of AIDA will be credited to our account. If we institute a program that reduces the draw on the AIDA program, we will be credited with that because, you see, it is adding income to the farmer. When he fills out his AIDA form, that is reflected in there, so his payout under that program would be somewhat diminished. That savings would be recognized by the federal government as a direct result of the program, whether it is the kind of program that we are talking about, and we would receive credits for that.

Ms. Wowchuk: I would like to know what other options the government is taking to help out with the situation that the farmers are facing. I look at the package that was put out by the Saskatchewan government, and one of the things that they are offering is greenfeed coverage. Given that there is a serious weed problem and some work has to be done to try to control them, there could be a hay shortage, farmers talk about pastures being flooded out and loss of hay this year, are you giving any consideration to offering the same or similar options to what Saskatchewan has where there would be insurance coverage for greenfeed coverage?

Mr. Enns: Mr. Chairman, I am advised that we are currently putting together a package of additional programs, that some would come that we want to present first of all to my government but also to the federal government that would call on their participation in funding at different levels, either under the JERI program which was a 50-50 flooding, some of it perhaps qualifying under the DFA program which has a formula that changes the percentage of provincial-federal participation at different levels of costs. I am advised that the Department of Agriculture is looking at a greenfeed component similar to what has been announced in Saskatchewan. That will be part of a package that we will be seeking support for and urging farmers to produce greenfeed. My general manager informs me that if, for instance, we have a field of barley that we have insured for barley, we will allow that to be cut for greenfeed. They will go down and do an assessment and appraisal of that situation before that is done. So there is that kind of flexibility in the program. I am sure we are going to see quite a bit more.

Ms. Wowchuk: I wanted to ask a question about another program that is covered under Crop Insurance. That is the livestock depredation program–predation, predators–

Mr. Enns: That is when the coyotes get our animals.

Ms. Wowchuk: That is right. We have raised this with the government before, and it was certainly a program that cattle producers have called for and one that they have looked for. Can the minister indicate what has been the uptake of that program, what kind of claims have been made, what number of claims have been made? I guess I would like to know what number of claims have been made, what number of claims have been denied, and what kind of dollars have been paid out on it.

Mr. Enns: We had 307 claims this past year. Compensation was paid to a total of $121,400. Administration, cost of administering this program was $27,000. So the total cost of that program was $148,700 or $149,000 total cost. The question that was asked, out of the 307 number of claims, I am assuming these were all paid-out claims? Was that 307 out of 500 requests? I think that is what you were asking. I am advised about 70 were declined.

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Ms. Wowchuk: There were a couple of issues raised with people in my area of the province who had problems with wolves. It seems to be that first they thought you had to find the animal immediately after it was killed or put down, but that really does not happen when you have got very large pastures. Sometimes, as the minister knows, it takes a few days before the ravens start to circle around where you can actually find where the carcass is. There are producers who are having difficulty with that, but when we raised that with the minister he said last fall that it did not necessarily have to be at the time the animal was lost, it was the time it was identified as being lost.

I had a constituent who called me just the other day who was having a problem with that, where he had lost an animal. He then found and shot the timber wolf in the area but the claim was denied because there was not evidence that the timber wolf had taken it down. Who makes the judgment call? How is a decision made as to whether or not this is really a wildlife predator that has taken this animal? Who makes the determination and how is that made to determine whether, even in a case where there might be a timber wolf that is seen in the area, a decision is made that it is not worthy of compensation?

Mr. Enns: Obviously, there is a judgment call that has to be made in assessing probable cause for the loss of a domestic farm animal. The Crop Insurance Corporation calls on Natural Resources personnel as a third-party verifier of this, the assumption being that they have a so much bigger background in predators' habits and of course, as a department that has the responsibility, would like to know. It is helpful to them when they see a higher incidence of wolves or other predation take place in a certain area that they can be alerted to some management programs that they ought to be considering in that area.

I am also advised there has to be a carcass, a carcass has to be found within three days. We are getting a little more flexible. If there is a genuine dispute about whether or not that was an animal lost as the result of a predator or natural cause, there is a possibility they will settle in some instances for a 50 percent claim if we do not feel we can prove it that it has been a predator's loss. Loss has to be reported within three days of discovering the carcass. I appreciate that there was a fair bit of controversy on this very issue at the time we introduced the program.

I will certainly recommend to Crop Insurance and to ourselves in the department to make sure that our producers, particularly our livestock producers, make use of some of the newletters that they have, like the Manitoba Cattle Producers Association, that they are fully informed of these kinds of regulations. I think if more of our producers understand that, the program will be more appreciated. I think I say without standing to be corrected that we are one of the few jurisdictions in the country that are providing this kind and this level of protection.

Ms. Wowchuk: I would like to just leave the name with the minister of the individual who contacted me yesterday. His name is Mr. Jim Burdeny from Ethelbert. If the minister could have his staff look into that particular situation and then I can get to back to him as to the details of why his claim was rejected, that would be very helpful.

Mr. Enns: Staff has noted the name, and we will certainly undertake to do that.

Ms. Wowchuk: I did not quite get the minister. Is there an appeal process, or is it a negotiation if an individual is not happy with a decision?

Mr. Enns: My staff indicate that they are working on an appeal process.

Ms. Wowchuk: Is there any detail on what that appeal process would take, or is just something that is in the developing stages?

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Mr. Enns: The honourable member will be aware that we do have an appeal tribunal associated with the Insurance Corporation, and that will be the body that would hear it. We are working out the specific details about how and on what grounds a case would be appealable. The basic one would be the question of whether or not it was a predator kill or a natural causes death.

Ms. Wowchuk: Mr. Chairman, I look forward to hearing the final decision on that, because it is one that needs some clarification. I think there is a little more information needed as to when claims have to be made, how soon after the finding of the animal, and I think there needs to be a little bit more information and an avenue for appeal, although sometimes these losses are not very great. In some cases, if it is one or two animals, even one animal, it can be a fairly substantial loss for farmers. So if they have an avenue to appeal it, then that would be helpful.

Under this line, we also have–

The Acting Chairperson (Mr. Faurschou): May I interrupt the honourable member for Swan River.

Mr. Enns: I just wanted to inform the committee that I lost only one calf in calving season this time to a predator. A coyote chewed its head off while the cow was having a difficult delivery. But my deputy minister prevented me from applying for any support under this program, because he said that would be a conflict of interest, and ministers are expected to take these kind of losses. Is that not what you told me? [interjection]

Ms. Wowchuk: Sometimes that is some of the risks you take when you get into this kind of business.

Mr. Enns: Absolutely.

Ms. Wowchuk: Mr. Chairman, under this department we also have NISA. I believe this is where we could get some information on that particular program. When we looked at some of the statistics on NISA, we found that across Canada about one-third of NISA participants had accounts which balanced at just $395, in contrast to the top 1 percent of participants who held 13 percent of the NISA funds.

Mr. Enns: This is not under Crop Insurance. Did you want to do the Manitoba Credit Corporation next and then we go into safety nets?

The Acting Chairperson (Mr. Faurschou): Thank you, honourable minister. Is the committee willing to move on?

Ms. Wowchuk: We could call Crop Insurance and then we could move on.

The Acting Chairperson (Mr. Faurschou): Could I ask the committee's indulgence in this respect? Are you prepared to pass at this time the lines involving the Manitoba Crop Insurance?

Ms. Wowchuk: I am sorry. I am looking at the lines here, and I see Crop Insurance and then NISA under the same area. [interjection] Pardon me? NISA comes under the same area.

The Acting Chairperson (Mr. Faurschou): There is a question on the floor to the committee. Is the committee willing to pass at this time the lines pertinent to Manitoba Crop Insurance Corporation? [agreed]

Mr. Enns: We will leave NISA line open.

The Acting Chairperson (Mr. Faurschou): Very good.

Item 3.2. Risk Management and Income Support Programs (a) Manitoba Crop Insurance Corporation (1) Administration $4,312,600–pass; (2) Premiums $29,600,000–pass; (3) Wildlife Damage Compensation $1,000,000–pass.

Item 3.2.(b) Net Income Stabilization Account $18,500,000.

Mr. Enns: We have agreed to hold that. We are now skipping over to MACC, the Credit Corporation.

The Acting Chairperson (Mr. Faurschou): Very good. The will of the committee has been to decide to pass on the Net Income Stabilization Account.

Moving on to Item 3.3. Manitoba Agricultural Credit Corporation $9,455,300.

Mr. Enns: Mr. Chairman, may I just introduce Charlene Kibbins, who is our assistant director of the Manitoba Agricultural Credit Corporation. Mr. Gill Shaw is likely on his way. Honourable members will appreciate that when we get these committee calls on such short notice, in both these instances–the MACC head office, of course, is in Brandon; Portage is a home for the Crop Insurance Corporation–it is somewhat difficult to have them here. But Charlene will be able to respond to any and all the questions that the members of the committee may have. Thank you.

Ms. Wowchuk: Mr. Chairman, I just wanted to, briefly, under Manitoba Agricultural Credit Corporation–there has been legislation brought forward to change The Credit Corporation Act. I have talked to some people about it, and they tell me basically it is just updating the act to bring it into today's language, as the major change. But I guess I would ask the minister if he could indicate the purpose behind it. Is that what it is, just to update the act, or are there some other reasons why we are now making changes to this act?

If I recall correctly, last year we made some changes to the act that were housekeeping in nature, and now we are doing it again this year. I wonder why those kinds of changes, if they are just housekeeping, were not all done in the–I understand it is a complete rewrite of the act–but why did it not happen last year when there were some changes being made to the act? What is the purpose of taking that on right now?

Mr. Enns: Mr. Chairman, I should advise the honourable member that it is more than just housekeeping. This is modernizing, bringing some needed changes in principle to the operations of the corporation. We were having to virtually amend the act every year to accommodate the changing face of Manitoba's agriculture and the kinds of things that farmers borrow money for.

I would call it a significant piece of legislation that continues to recognize that Manitoba Agricultural Credit Corporation is an extremely valuable tool that the Department of Agriculture has, the government of Manitoba has, to provide needed support, particularly targeted support. Manitoba Agricultural Credit Corporation still, in the main–it is reflected in its policies–targets the start-up farmer, the young farmer. We still have, although it has been decreased, some subsidized support for that young farmer in the Young Farmers Rebate Program.

So the new act encompasses all of these thoughts. It also, if the honourable member has read the act properly, recognizes that, where in 1958 when the corporation was founded and subsequent years that it has operated, it was clearer to identify what constituted a farmer or a farm enterprise than it is today, so there are some changes to the act that allow the corporation to broaden its mandate to include what, in fact, is happening in some instances out in the landscape beyond the straight family farm unit that we have been more or less mandated and constituted to service.

I look forward to a lively debate on the bill when the bill comes to the Chamber and certainly will have senior staff of MACC available at committee stage of the bill to provide specific information, clause by clause, as to what they portend to do and how they have changed from the old bill.

Ms. Wowchuk: Is this legislation allowing for a shift away from the normal role of MACC? The minister talked about a focus on start-up farmers and those who cannot get loans. Does this change allow it to move more toward the corporate farm or toward the co-op farm? What is the change that you are seeing within the agriculture community that you feel has to be addressed in this change in legislation?

Mr. Enns: Mr. Chairman, I am told that the act properly reflects the basic mandate of the corporation; that is to provide financial assistance to start-up farmers with the emphasis on the start-up farms but to any farm operation that perhaps over the years has changed somewhat. He has some involvement in some further value-added operation that he is associated with on his farm that in the more restrictive, older act would preclude the MACC from providing any consideration for support, but now makes it able. It is fair to say it is a broadening of its mandate.

It is also fair to say, Mr. Chairman, that there is in our current government programming a gap, if I may put it that way. We are primary production farmers. People who are involved in farming production are for some reason–the member may want to take it up with the appropriate ministers–excluded from those support programs that governments have in departments like Rural Development, departments like Industry, Trade and Tourism, the REDI program, the Grow Bonds Program, some of the economic development, industrial loan-like programs that the Minister of Industry, Trade and Tourism has available to businesses in Manitoba.

But if it is a business that is relative to primary production, they are specifically excluded from many of those programs. In some instances they come very close to where MACC could help them, perhaps not necessarily in the direct loan capacity, but in the diversification program that we have. That has become a very popular program that is recognized, particularly by the private banking institutions, of being extremely helpful in bringing together some of these operations on the farm scene.

Ms. Wowchuk: Is the minister then looking at a way to support farmers who are in the primary production business who are looking then to get value added to their product? Is that what you are seeing?

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Mr. Enns: We have kind of taken a pause in our expanded potato production, generally speaking, but I am an optimist, and I believe that today we are still in a very good position that sometime not too many years from now we will be expanding our potato production again.

Potato production is an expensive business to get into. You might get two or three potato producers willing to get into the project but wanting to come together and build one storage facility which are major dollars. Under the old act, it would be difficult for the corporation to deal with these people as a unit if they so chose to, maybe three potato farmers building under a corporate name, owning a joint potato storage facility that services the three farms.

We are seeing some, and I know the honourable member may wish to pass a social comment about this. It is not being driven by the Department of Agriculture or any particular policies, but the growth to consolidation continues to take place in all aspects of farming. We have had some fairly significant expansion and/or coming together in the dairy operations where we are seeing herds of 300 and 400 dairy people coming together, and I believe there is a diversification going out to one of these operations. Certainly the hog operation continues to be in an expansion mode, and if that price recovery does become complete in the next few months I can expect no let-up in the continued expansion of the hog industry.

Ms. Wowchuk: The minister talks about the expansion of the hog industry, and certainly that is going to happen. We are going to see that grow. You talk about the people joining together to work together. Well, I think we have come full circle. I recall a time, and if you read back, when my parents and my grandparents were farming, not everybody owned a thrashing machine. They shared equipment, and we have come full circle. We are coming back where, instead of being so independent, we are learning how to work together again. And I see nothing wrong with that. If that is the route, and if there is an encouragement for that to happen and for people individually not to have to go beyond their means, what they can afford and get themselves into deeper debt, well, that is something that is certainly welcome.

But if we are looking to value-add on every farm–I know I talked to some farmers just recently who, when we talk about value-added, they say: where are we going to find the time in the day? We cannot grow the potatoes and make the potato chips too. There is a limit to how much value-adding that we can do on the farm. There is need for primary production, there is need to diversify, and I think that there is need to work together on some things. If that is the goal that this legislation would allow for the corporation to have the flexibility that they need to work with producers when they want to have a joint venture such as this, then that would be a good move. But would there not have been a clause under the act that would have allowed for people to join together in a joint venture prior to this? Did the legislation not allow for it or was it just too complex?

Mr. Enns: It allowed for it, but there were some specific incidents that prevented us from considering it. Just the changes that are taking place in the farm industry.

Ms. Wowchuk: The minister talks about when the corporation was founded in 1958. Some of those farmers who started in 1958 who had borrowed money from the corporation are now looking to–some of them, I would imagine, are out of farming now and some of them are looking to get out of farming. We have to look at some kind of transition.

It is very challenging, with the size of operations and the amount of money that is needed, for young farmers to get started, to take over the family farm, for example. Parents want their children to take over, but they cannot afford to be left without anything because this is their life investment in there. The children cannot afford to buy it out completely. Is there any move to look at any kind of transition funding that would help young farmers take over the family business and continue those operations which are very important? We want to see those young people stay in our community. We have a decrease in the number of farmers that we are having. We do not want to lose more of them, and I think that is something we should think about.

Mr. Enns: The honourable member raises an issue that the deputy minister informs me has been the centre of a great deal of discussion and program planning, particularly under our farm management program sector. We have developed whole sets of workbooks, if you like, to assist families in making that generation transfer. Certainly Skip has informed me that the corporation works very directly with families under these circumstances.

I might also say that in many instances we find ourselves passing on our maturing customers to FCC, and so we do not necessarily have them here. That is fine with me as well, but it is a matter that the Department of Agriculture considers of real importance, that we spend some considerable resource time in terms of staff and efforts in hosting regular programs.

I remember I attended one program some years ago where we have co-partners with the private sectors in the form of capable chartered accountants and some banking people and estate planners and lawyers. We all sat down and had a workshop on this very issue. It is an important issue. It can be very stressful on the family because it can be a sensitive issue, the coming generations sometimes feeling that, well, it is owed to them because they have been working on that farm for a good portion of their lifetime at what, I suppose some might say or, in their own opinion, might think, is less than adequate or full wages, but were prepared to do it in the consideration that they were going to be deeded the farm.

But then to cover off what the honourable member has expressed a concern, and in this day and age a retiring farm couple needs to look after, hopefully, and what is prudent, their ever longer span of life that needs to be financed somehow or other.

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Ms. Wowchuk: I am pleased to know that the department is looking at those kind of things. I really think that it is something that we have to work on, that whole transition, and how it is that we can help families go through that transition smoothly.

I look at the line in the budget, and we see that there has been a fairly substantial reduction in Net Interest Cost and Loan Guarantees. Can the minister indicate what has changed there, and why we have that kind of an anticipated reduction in funds?

Mr. Enns: I am advised here by my capable staff that this decrease is due to a four-year history of gains on sale of property, interest and investment income.

Ms. Wowchuk: I am not quite understanding what that means.

Mr. Enns: Actually, I did not understand that either, but I was just checking with you to see whether–

Ms. Wowchuk: Are you telling me that that means you have sold–you said increased sales. What have you done? I do not know what you have done.

Mr. Enns: I am apprised. As the member is aware, the corporation continues to sell land from time to time that comes into its possession through different means, very often back to the lessee, who has perhaps been leasing the land for a while. What this reflects is that the land in fact has been selling for more than its book value, so it cuts down on the demand on that line item.

Ms. Wowchuk: The minister indicates there is more and more land being sold off. Can the minister indicate how much land the corporation still owns and what does he anticipate that plan to be? Is the move continuing to dispose of that land as quickly as possible? I assume we no longer have long-term leases. The leases are short term, and when those come up, the corporation is trying to sell them?

Mr. Enns: I am pleased to indicate to the committee that as of March 31, 1999, we have some 30 what we call long-term lessees, that is, that have leased land for over five years up to the age of 65 and then a transfer has to be made. We have some 37 short-term leases, one or five years, for a total number of lessees of 67. The value of that land, book value is $4.7 million and the number of acres is 28,559 acres. That is down considerably from, say, over the past eight or nine years, 10 years. Certainly there was a time, I believe, when this government assumed office in '88, that was probably in the order of 134,000, 135,000.

Just for comparison sake, last year, March 31, 1998, we had 37,000 acres. Today we have 28,000 acres. So a further 9,000 or 10,000 acres have been subsequently sold. Last year we had 90 lessees, a combination of long term and short term. This year we have 67.

If the member is looking for a policy direction, certainly we encourage and I have encouraged the corporation to, where applicable, and in most instances–I am looking to Charlene to see if I am right–in most instances the land is eventually sold back to a lessee. In fact, we encourage that to happen. We are not forcing anybody to do that, but obviously that long-term lessee is happy to remain that way, but at some stage of the game he often comes to the determination that he would like to purchase land, and he is then in a favoured position, you might say, to purchase that land.

Ms. Wowchuk: Does the individual who is the lessee have first option to purchase the land, or does it go up for tender?

Mr. Enns: That is what I meant by saying favourable conditions. The lessee has the first option to purchase. If he chooses not to exercise that, then it is open to tender process.

Ms. Wowchuk: I guess what I am looking for, a few years ago when the government was moving quite aggressively to get rid of their MACC land, for some people it was quite a burden. Because of their financial situation, they could not purchase the land, but they needed the land. It was part of their operations. I know in a couple of cases where it had put a fair amount of pressure. In some cases, they were not able to purchase the land and, of course, then had to change their operation. What I am looking for is: does the government feel it is so important to dispose of this land that they are willing to put added pressure onto families who want to continue to operate but cannot because of this policy decision to dispose of MACC land?

Mr. Enns: The staff informs me that there is no specific policy to do what the honourable member suggests. There is, I suppose, the greater comfort level in the longer term lessee. In the short-term lessee, there is that pressure for sale, but, again, staff informs me that they are also very co-operative in helping to finance the sale.

Ms. Wowchuk: I am not clear then. The minister is saying there is a move to reduce the inventory of the corporation, the amount of land, and leases are now signed. Do producers who lease land from the corporation lease it for–what is the longest lease you can get at this point? Is it after that lease has expired that you have the opportunity to lease again, or must you consider purchasing the land at that time?

Mr. Enns: Mr. Chairman, I will redirect from the material provided me by the officer of the corporation: Depending upon the settlement arrangement, MACC may offer the original landowner debtor a lease with a purchase to option for a term of up to five years. If the original landowner debtor is not in a position to purchase all of the original landholdings during or upon the expiry of initial lease term, MACC offers a subsequent three-year lease, with a further purchase fund provision.

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That means that during these three years MACC actually provides dollars to put on deposit on the land. If a portion of the original landholding is purchased, MACC offers a three-year lease for the balance. It does not have to be the entire parcel of the original landholdings, and the purchase fund provision becomes the lessee's option. The maximum period that MACC leases land for is eight years. Any land not leased or sold in the course of debt settlement is advertised to the general public for sale and lease. MACC will always be in this business, because regrettably MACC will always find some land coming back to them. At least it is not the policy of this government that MACC acquire large holdings of land but to, again, use that as a matter of fact to very often enable the farm family or farmer in difficulty to maintain a farm, and by recapitalizing and, quite frankly, by the corporation sometimes taking a loss, that is accomplished.

Ms. Wowchuk: So an individual can lease a piece of land for eight years. If that individual chooses not to buy, it goes up for sale. If nobody is interested, is it then re-leased? Is there the option to re-lease again? I guess, I would want to know also the take-up. Is there a lot of land that is put up for sale by MACC that ends up staying in this because there just is not the ability for someone to purchase it, or is there a great demand and is the land sold most of the times?

Mr. Enns: The policy is that after the eight-year expiry of the lease, the land is put up for sale as always in the first instance to the lessee that has first refusal; failing that, it is put up for general sale. If the land does not sell and it goes up for lease again, the lessee has the option of successfully bidding on the lease. The lessee under those circumstances is not a preferred position but he would be bidding against others who may wish to lease the land as well. So it is a combination of things.

Ms. Wowchuk: I want to talk about the Manitoba Producers' Recovery Program. A program that the minister brought in just this year, one that there certainly has been an uptake on, and one that will help farmers through a difficult time, particularly, the hog producers. I know of one particular hog producer who said this was a very important program for him, even though he had to pay back the money. It got him over the hump, so to speak, until the prices came up again. It provided for a much-needed cash flow. Can the minister indicate, there was a strong uptake and it required additional money to be put into the program, what the participation is right now? Is there still a demand or have we reached the peak of the demand, and is it levelling off now on this particular program?

Mr. Enns: Mr. Chairman, I think in my opening statements, I covered some of the facts. I am very pleased with that program. It is not, as the member correctly identifies, a handout or a grant program. The farmers do have to pay these loans back, but I want to compliment the staff and the management of the Manitoba Agricultural Credit Corporation for having really responded, in a very short order, to again what turned out to be a fairly major undertaking, that is, to provide this emergency recovery loan to needing farmers and to do it in a way that at the same time showed some responsibility for the stewardship of public money that we all have to be concerned about, but also to try to keep the paperwork to a limit. In the main, I believe they have succeeded.

I would like to acknowledge that we have our General Manager Gill Shaw come and join us now from Brandon and Karen McEachen from Brandon as well.

Back to the loans program, I really do want to compliment them. They had to instruct a lot of their field officers; in some instances, they were less successful than in other instances. There were some initial misinformation as to what was required to do it, but the simple fact is that within these relatively short months, four or five months, over $27 million have been approved to date. I believe, some $24 million of money have actually flowed into the community.

The member is right. I recently received authority to increase that from the original $25 million to $45 million, and while the activity is slowing down a bit at this time, we expect the better part of that $40 million to $45 million will be taken up by the July 31 deadline. Of course, one of the features of the program that I think is helpful is the corporation is prepared to, on an as-needs basis, a case-by-case basis, allow for a deferment of a year or even up to two years any payment of principal and interest.

That is very important for some of these producers who are caught in this low commodity price squeeze. I am hopeful that, for instance, some of our hog producers who avail themselves of this loan will be in a good price recovery position perhaps later on this year and will then find it quite within their means to be able to meet these obligations of this loan. In the meantime, as the member correctly points out, it helped the producer over a particularly difficult period of these price slumps.

Ms. Wowchuk: As with any program, there is always going to be some that do not qualify and some who are unhappy because they hear an announcement of a program, and when they go to make their application, they do not qualify. Can the minister indicate the number of people that have applied for the program and the number or percentage of people who did not qualify? What would be the reason for disqualification? Was it a review of an individual's financial situation that would result in them not qualifying for the program? What was your requirement to qualify?

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Mr. Enns: Mr. Chairman, out of a total of some 532 applicants whose loans have actually been disbursed, we have only declined 52 of them, and in those instances they would be forwarded to, in many instances, to the Farm Mediation Board.

I do not have the Farm Mediation data before us, but I know that in many instances they have helped them restructure their loans, and only in a few isolated cases were they actually totally declined. Regrettably, as the member knows, there are some situations where it is just not prudent to borrow more money for different reasons, and regrettably those cases keep showing up. Whenever a new program is announced, they are very often the first at the door to ask, okay, now here is a new program. But if their experience in the past has been such that a corporation simply cannot in good conscience make a loan to them, they will have to refuse them.

But I am trying to get an understanding that there have been relatively few declines, less than 10 percent.

Ms. Wowchuk: What is the maximum loan that a person can get?

Mr. Enns: This program had a specific limit set at $50,000 for the individual and $100,000 for the corporation or family partnerships, if they were so listed in their farming books.

I might just add for further information, I have kind of a sector breakdown: $3.3 million or 11 percent of the $24 million disbursed went to beef operators. Sixty percent went to grain operators. That is a surprising figure, 60 percent or $16 million. Hogs took the next biggest chunk at 26 percent, or $7.4 million went to hog producers. We had just a very small amount, less than $200,000 to a poultry operation, and then others, also a very small amount, 1.4. That might have been my wife's enterprising South African Boer goat meat venture or her sheep venture, but, then, again, I know that my deputy minister would not let me apply for a loan because he would call that a conflict of interest again on the part of the minister. So it is not my family's loan.

Ms. Wowchuk: The minister talked about the Manitoba Farm Mediation Board, and the notes here say that the corporation can provide special farm assistance. Is it financial or farm, to farmers in need, in co-operation with the Farm Mediation Board? So what funds would be available from the corporation for people who are required to go to the Mediation Board? Is there a special program that helps them do that?

Mr. Enns: I am advised that the corporation has in place a specific amount of money, $5 million, that is used exclusively by clients who have gone through, availed themselves of the farm mediation process, then with the co-operation of the corporation and the use of these funds have worked out a restructured refinancing arrangement, and that is the degree that the corporation works with the Farm Mediation Board.

The Farm Mediation Board of its own has a modest budget line and can, on occasion, provide some relatively nominal or minor bridge financing. I know in one case, I think they paid a hydro bill for a farmer of $4,000 or $5,000 that had gotten badly out of whack. After working with the corporation and doing the major refinancing of a farm loan, using that $5-million fund, and there are some little bits and pieces that are maybe still left, they can provide some additional support like that. When we deal with the Farm Mediation Board, I would be pleased to provide the honourable member with that data.

Ms. Wowchuk: So the funds through the Credit Corporation, the $5 million that you talked about, would be used to refinance farmers who have gone through the mediation board in the form of loans. Is that correct?

Mr. Enns: Yes. Usually what I am assuming will happen, a farm family gets into serious difficulty. Creditors start calling in their notes. They are at the verge of facing bankruptcy. They avail themselves of the farm mediation process. The farm mediation process will take a long and hard look at it. Remember, these are in the main good Manitoba farmers who know their business. They will convince a banker to hold off here, a credit union to hold off there or MACC and CCC. Then we will work out a restructuring program that is designed based on their look into the farm operation: Well, this could be viable; this could be a viable operation; this farm will return enough if we take these accumulated loans; it would help, the $5 million, put that into a longer term, lower payment term. Interest rates are favourable, 6.5 percent, and keep that family going.

It is kind of an unheralded program, but I think it is a very important program that has a reasonably good success rate. There are failures in everything, and there always will be. Nobody is automatically guaranteed at making a living at farming, but these people do a pretty good job.

Ms. Wowchuk: The program also says that the corporation can provide disaster relief assistance as directed by the province in emergency situations. Would that be where the Manitoba Producers' Recovery Program comes under? Would that be considered something that was disaster relief assistance or are there other programs that the corporation can offer in a disaster situation? Is there the ability of the corporation to become involved, for example, in the disaster that we are seeing in the southwest part of the province or other parts of the province? Would that be the kind of thing that the corporation can do? If the minister could outline perhaps a program that has been handled by the corporation that would be of the disaster relief assistance scale.

Mr. Enns: The corporation has the capacity to respond to various directions received from government from time to time. As an example, it became apparent that, in the reconstruction of the properties in the Red River Valley after the disastrous 1997 flood, even despite the fairly generous combined federal and provincial support that called for up to $100,000 or $130,000 I believe for a home, another $130,000 for a business, something like that, many, many, many residents were in need of doing some extensive floodproofing before they built these homes, and there was a maximum of help available under those circumstances. That would mean that the homeowner would have to provide the rest of the money. The corporation on very short order was asked whether it could fill in this gap.

We opened up offices in Morris, I believe, and Winnipeg here. That program has loaned out some $25 million to 325 homeowners, 119 farms and 40 businesses. It does that under that capacity; it was directed to do it. If you look at the core mandate of Manitoba Agricultural Credit Corporation, it is not to loan out money under these circumstance, but under the disaster assistance provision within their means they can respond and do respond in a very expeditious way. I am very proud of them. They have done a first-rate job. The manager reports to me that we were somewhat, I think, a little nervous about these loans, because these were not our normal clients that we deal with in terms of the farm community that we have experience with. Also under the circumstances, I mean, here an aggrieved party in the Red River Valley, who thinks his government is not doing enough for him, so he has got a loan out with a government agency. Is he going to be paying that back as called for under the loans? I think reports are that your accounts receivables on these $25 million is good and in keeping with the overall performance of the corporation, so we are quite pleased.

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Ms. Wowchuk: So that would be the Flood Proofing Loan program that applied in the Red River Valley. We were in the Melita area and in a couple of other communities where we heard about business people talking about the devastating effect they were going to feel because of not having the crop in the area. What they talked about was they said: you know, we are not looking for handouts, what we are looking for is we are going to need some loans to keep us going here.

Would it be possible to do something similar to this? Would it require a new program, or do you have the ability under the corporation's mandate right now to say, yes, we recognize there is a problem in another part of the province, there is need for cash flow to help these businesses go through, and we are prepared to set up a loan program to help them carry through this?

What would be the steps that would have to be taken? Is it possible to do and what steps would have to be taken to do this? Who does the direction have to come to from, the minister or from cabinet, to say we are going to set up a loans program in another part of the province, or does the corporation have the mandate to do that right now?

Mr. Enns: As was the case when we responded to the Red River Valley credit needs and the restoration of farms, homes and businesses, this would have to be a cabinet decision that directed MACC to, within the kind of parameters that would be set out, kind of, you know criteria that would be set out, but certainly I am informed that the credit corporation would be ready, willing and very capable of providing that kind of assistance in loans that, I think, some of the business community would find very helpful. Again, they have the capacity of deferring initial payments, allowing for recovery, and certainly those 40 businesses that we dealt with in the Red River Valley flood, they would write a reasonably good commendation for us, I am sure. I have heard the same complaints. That is something that could be considered.

Ms. Wowchuk: Well, I am pleased to hear that. I hope that the government will pursue that and offer that hope to those people who have expressed serious concern about their businesses, because in this particular business there are four people working now. He said by the end of the month, they will be down to two. A restaurant told us they were, I believe they said, down somewhere in the range of 70 percent of their normal business because people just were not coming to town for coffee and those kinds of things because they are thinking about not having the money. We do not want to lose those businesses because we know that when we lose a business in a small town, it is really, really hard to get it back.

So I would encourage the minister to look at this. Given that we are having the difficulty that we are with getting any assistance from the federal government, we have to look at what we can offer here. Certainly, we hope that it will be the federal government that will come through, but in a loans program like this, I think it would be very helpful for those people to know that there is some place that they can access some money and keep going for awhile.

Mr. Enns: Well, Mr. Chairman, to the members of the committee, I want to take this occasion to at least put on the record that along with this additional activity that the corporation has engaged in, they have had a record year in terms of their regular loans portfolio, I am advised, in excess of a hundred million dollars that have been handled in their regular loans program, which is a record amount for the corporation when you consider that a few years ago we were loaning out in the order of $35 million to $40 million.

In 1994, it was $28 million, $29 million. This year, it is in excess of a hundred million dollars loaned out, direct lending of $78.5 million to 1,136 clients. Flood loans, which we talked about, are $12.7 million. Producer recovery loans, these are older figures, $14 million; guaranteed operating loans, Cattle Feeders' Association loans, but in total in excess of a hundred million dollars has been loaned out. That is in the regular loans portfolio.

In addition to that, I have called upon the corporation to jump to the pump on the recovery loan that we just talked about that we implemented this December. They have just finished and are just concluding looking after a lot of people in the Red River Valley that found their services very beneficial. So I believe the corporation has performed above and beyond its call.

Quite frankly, I am in a constant fight with my senior management of the department and the management of the Manitoba Agricultural Credit Corporation because I think the Manitoba Agricultural Credit Corporation are pretty decent guys, and I would like to get them some more staff once in awhile. So there is tension in the office of the minister and the deputy minister here on that issue, and I am searching for some outreach on the part of my Ag critic from the opposition to help me in this fight.

Ms. Wowchuk: Mr. Chairman, some of the people who will be the hardest hit are young farmers who carry the heaviest debt load. Many of them, I am sure, have loans with MACC. Some do not. Some have loans other places. Is there any plan or thought being given as to how you are going to deal with these farmers who are not going to be able to make their payments?

Suggestions have been made that rather than collecting the interest this year, you add it on at the end of the payment or look at some ways that we can help these farmers who are not going to be able to make their payments.

They are going to have a hard enough time staying alive. If some of them have loans with MACC, how are you going to deal with those? What have you got to offer those farmers? Is there any help that you can offer those who are dealing with other financial institutions? Is there any discussion taking place in the department with MACC or departmental staff to talk to banks and credit unions and how they can help carry this load? They benefit when farming is going well. They loan them money, they make the interest, and they reap the rewards. How is MACC looking at sharing this burden? Is any discussion taking place with other financial institutions to help share this burden?

Mr. Enns: My deputy informs me, and I am well aware of it, that throughout this system, we have had these kind of very serious problems on the farm where in the first instance it was occasioned by the, very specifically, collapsing hog prices, for instance, you know, with the ongoing low commodity prices. Now we have this, in addition, flood problems and unseeded acreage problems.

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MACC was very quick to respond to individuals who found themselves in difficulty by allowing their loan payments to be deferred in two ways. They could be set aside and a repayment term over the loan extended by the length of the deferment or reamortized over the remaining term of the loan, which would result in a somewhat higher payment, but in other words a great deal of flexibility. As of June 17 they had 54 clients affecting 110 loans have asked for deferred payments, and we are doing that. We partner with the private sector.

Certainly over the last few years, particularly with our Diversification Loan Guarantee Program, I think it is fair to say, Mr. General Manager, that our relationship with the private sector has been considerably enhanced. Many of the private banking institutions are recognizing the value of the program that we offer and are using it. So our interface with the private bank system is there.

I believe FCC is doing similar things with respect to payment deferment under stress. I know I have used it publicly, that showing kind of leadership from the public sector lending institutions. I use every occasion that I can to impress upon the private banks and credit unions that they ought to be doing the same.

My deputy informs me that they, in fact, are doing it. It is not really in the interests of any of these institutions to foreclose on them, even more so under these circumstances. I noticed that particularly in the hog crisis, and it really was a crisis. We just went from 70 cents, 80 cents to 20 cents. There was a disaster on the fields. But none of the banks or none of the credit unions ended up owning a hog barn. Some of them did not mind owning a section of prime agricultural land. There was a time that the Royal Bank was the biggest landowner in the province after another difficult period of farming. But none of these bank credit managers wanted to own a hog barn. I am told that surprisingly although, yes, there were some who chose to throw in the towel and give up at that time, there were no serious collapses. There was no serious call that created total failures. I am looking at the officers of the corporation here, as far as I know, and none have been reported to me, that they have money out on numerous hog operations, that you cannot report or have not reported to me any level of failures on those.

What has happened, there has just been a handful, a couple that have asked for just a two- to three-month deferment of payments and interest but no defaulting of the loan and carrying on. So that is a remarkable performance.

Ms. Wowchuk: That is within the corporation. The loans that you have out there, there have not been any defaults in. Is that what you are referring to?

Mr. Enns: I am talking about the private sector loans out where we have guaranteed; 25 percent is what our program calls for.

Ms. Wowchuk: The minister may have answered this, and I did not get the answer or did not hear him. You talk about loan–the ones that you are guaranteeing with the banks, but is there any discussion taking place within government or with the banking sector to look at looking at ways to defer? I understand that you are saying that the corporation has the ability to refinance loans for farmers that are in difficulty, but is there anywhere in the community that the minister is aware of or representatives of the corporation that has contact with FCC, that there might be discussion looking at what is happening in the farm community, and how we can stabilize that farm population so we are not getting people leaving the land?

Mr. Enns: Staff advise me that we have met with FCC, and they have indicated to us that they are prepared to consider loan deferral payments. We have also met with main line banks, and they too have indicated that they will work. They tend to not make grandstand public pronouncements about this, but they do assure us that they will work on a case-by-case basis, as we will. I trust and I hope that the private institutions will respond to the genuine need that too many of our producers are feeling right now.

I am aware that we meet once a year. I am just trying to remember the date. I think it is early on in the new year with representatives. There is the Canadian Bankers' Association, and they have an annual meeting with the Premier (Mr. Filmon) and cabinet. That is always an occasion where we can as a government ask for their co-operation. That is all we can ask for. They are private businesses, but I can recall using that occasion–that was shortly in the new year, January, and our hog prices were at their worst. I can recall making a specific pitch to them saying, surely, gentlemen, you do not want to end up owning a bunch of hog barns, and they all agreed they did not, but more seriously, took that occasion to do exactly what you are asking, Ms. Wowchuk, by asking the bankers.

How does that story go? How can you tell a compassionate banker? Something to do with the glass eye and the natural eye, and it is the glass eye that shows emotion or a tear coming out of the glass eye, then you know you have a really good banker. It is something like that. Maybe I have got that story mixed up. I need John Taylor to help me tell that story properly. He has got these Australians from the Australian outback, and he tells me these stories every once in a while.

Ms. Wowchuk: We often hear about diversification, and I was in Rural Development Estimates, and the Minister of Rural Development (Mr. Derkach) was talking about all the growth in rural Manitoba. And all the cases that he highlighted were very much close to the city or south of No. 1 Highway. That is good; we want to see the industry grow, but the corporation has the ability to lend a fair amount of money and promote different kinds of industries. So I wonder what steps does the corporation take or the government take to try to encourage the growth of different agricultural industries north of No. 1 Highway in the Interlake area. In the Interlake, there is some growth, but I think that we have to look at the whole province and try to get some growth in other areas.

If I look at the part of the province that I represent, that is the area of the province that was hardest hit by the change to the Crow benefit. We had the greatest increase in cost of freight. I recall one member of this Legislature who said: It is just a different mindset of people that live in certain areas. But the government also, I believe, has a responsibility to promote and encourage growth in other parts of the province.

So I would ask the minister what his vision is for other parts of the province and how he plans to promote to get some of this other growth and whether he feels that Manitoba Agricultural Credit Corporation can play a role in having some of this growth develop in other parts of the province.

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Mr. Enns: In our extension work through our various Ag rep offices throughout the province, we have a lot of staff, first of all beginning with the ag rep, and specialized staff that are always looking for and talking to and working with the local people within their district about what possibilities there are for some additional economic activity, agro added-value activity or so forth. But, in the final analysis, it is the dollars and the economics that shape these decisions that are made by the private sector. We are not as a government involved in developing businesses. I suspect the member really would not expect us to. But, certainly, I think that as communities focus a little bit more on what their strengths are rather than looking at their weaknesses, they very often–and some of that process is done through different programs in other departments like Rural Development through the round table concept. Communities decide that they have real opportunities in specific areas, maybe the tourism area. We I do not think have exploited the agro-tourism opportunities to the fullest, although we have a program that is of some standing, of some tenure, that promotes farm visits by our urban cousins and others who come to visit us from different parts of the world.

It is to create the kind of climate, in my opinion, that will encourage entrepreneurial efforts, whether it is done individually or collectively. I am sorry, I must say, and I do not have the full answers to what happened, but I am assuming that we will come, for instance, to the fledgling hemp industry that announced with considerable fanfare operations in the Dauphin area. That is what I say about how the added value or the jobs or the economics kind of follow some other form of leadership.

In this case, it was the fact that in that Dauphin area there were more farmers than elsewhere in the province that were prepared to seriously look at that new crop in hemp. That predicated and that more or less made the decision. It was not a government. There was obviously a great deal of support for that new crop, commercial hemp, in the Dauphin area, and a company had made plans to establish there. I do not have the data on it, but it is my hope that–the crop is being planted; the hemp is being grown–something will shake out, and the folks in the Dauphin area will have a commercial hemp plant in the not too distant future.

In other instances, it is other matters. I see great opportunities in the future, and we are just really starting to see the challenge. It is a massive change that has taken place in our agriculture with the loss of the Crow, and that full impact is going to work on us for the next couple of decades. It will really be a decade or two from now that we will sit back and look at–you know, we think about how agriculture was pre-Crow, how it has turned out to be after Crow. That sounds a little bit like AD and BC and DP. Pardon me, it is all in the common age now, is it not?

Ms. Wowchuk: Mr. Chairman, last year we saw legislation come forward that allowed for new generation co-ops to be set up here in the province. I would like to ask the minister whether there have been many new generation co-ops that have been established. The minister mentioned the hemp operation in Dauphin, and I certainly hope that they get through the glitches that they are in right now and that becomes a reality and we do have the industry grow in the area. We have the processing plant there, as well. But those people also talked about forming a new generation co-op. They have not done that yet, but are there new generation co-ops that are established and that are accessing funds through MACC?

Mr. Enns: Mr. Chairman, I have a lot of enthusiasm for that new piece of legislation. Some of the most successful value-added agricultural enterprises that run particularly in our northern states, the big American sugar companies, are all closed co-op ventures. So while it is going to take a little while for it to catch on, certainly we have a few of them that are going. I believe the group of egg producers in the Dufrost area that have come together and built what they call Millennium Barns are in fact a closed co-op that involves about 10 or 12 members. There is a further group in the St. Claude area that is also in the poultry industry that is thinking about that. I do not know for certain, but I know it is a co-op; the group that gathers the straw for the Isobord plant is a farmers straw co-operative, they call it. Whether that is structured on the old or on the new, I suspect they would probably structure on the new once the new act was available.

So I think that is going to prove to be a timely piece of legislation, that producers will find an opportunity to get together and get some strength through numbers and will in many instances move the primary producer one leg up the food chain ladder. If we cannot get it through commodity prices, at least maybe we can get a more decent, a fair return for some of our labours on the farm through doing it that way.

Ms. Wowchuk: Are new generation co-ops taking loans through MACC, or do they have the ability to borrow money through MACC?

Mr. Enns: I am advised that they would be eligible for loans.

Ms. Wowchuk: If a new generation co-op were to establish and come to the corporation for loans, how would you determine the amount of their loan? Would you calculate it as what they would be qualified for as an individual, or is there a formula that would be used that would be used for a co-op to get their loan? How would you find the limits on it?

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Mr. Enns: Staff is telling me that, while the new generation co-op group can access it, the most expedient way that we could be helpful to them is through the Diversification Loan Guarantee Program where we can guarantee a project of up to $3 million. I have been trying to push that limit to somewhat higher or an unspecified limit, because as I mentioned before, we are getting into more and more of these $5-million, $6-million, $7-million, $8-million projects whether they are poultry operations or something else. Yes, the corporation can respond to that kind of request.

Ms. Wowchuk: Will the changes that are coming in this legislation enable the minister to move those loan limits to a higher level without going to cabinet, or will this be done through regulation? Is this part of the reasoning for changing the legislation?

Mr. Enns: I think the member has raised an excellent point. Certainly it is my belief that the corporation will be more comfortable in doing business of this kind under the new legislation, under the broader principles that guide the corporation in their lending pattern, yes.

Ms. Wowchuk: One other area that I wanted to talk about, I often ask this question and it is about: under the corporation there is supposed to be a line for fish farming loans, and is that line still there? The member for southwestern Manitoba has lots of water in his part of the province and is probably thinking about fish farming, so I just wanted to be sure there is money available for him if it is there. We see it there. Is there any interest? I ask the question because I just met with a group of people who are interested in fish farming, whether or not that loan is still available and whether or not any application has been made in it, whether any loans are out under that program.

Mr. Enns: Well, Mr. Chairman, regrettably some things do not get quite done and accomplished when fine public servants like the Honourable James Downey from Arthur-Virden decide to move on to private life and out of cabinet. There was a particular operation that was near and dear to his heart and my heart and my deputy's heart. You would not think my deputy had a heart, but he does have a heart for fish. He likes fish. Remember we spent quite a bit of time out there; we then hornswaggled the corporation into financing, if we could get that fish farming thing I am talking about, Glacier Springs, off the ground, there were excellent opportunities for about 50-tonne production units patterned much after the model of a feeder barn. It would require about $250,000 to $300,000 credit, and to answer your question, MACC would be ready and willing to provide that kind of assistance.

Ms. Wowchuk: In that long answer the minister indicated that there are no loans out under the fish farming program. That is what I was looking for.

Mr. Enns: You figured that out, eh?

Ms. Wowchuk: Mr Chairman, I wonder if the minister can indicate whether there is the ability under the corporation to lend money to First Nations who are interested in farming. We know that through the federal government there was a program that went sour, and there were no more loans available there, but is there under MACC the ability, and can the minister indicate what the requirements would be before First Nations individuals or a band would qualify for a loan, whether it be for livestock or whatever? Do they have the ability to borrow?

Mr. Enns: Mr. Chairman, I am advised by the corporation that we do do business with the First Nations people, but we cannot get into loan arrangements on reserve. We have a number of clients though off reserve. I assume in many instances it might be cattle or other farming ventures. Mr. Shaw indicates that we have, and we continue from time to time to talk to the First Nations leadership about that. If there were a way that we could come to terms with that issue and get some security, but of course it becomes a very sensitive issue for the First Nations people. They simply will not allow any agency such as the credit corporation or bank to take any form of security on property within the reserve. Without that security, it is very difficult for the corporation to process a normal loan, but they do have loans with a number of First Nations people off the reserve.

Ms. Wowchuk: So then, getting back to the fish farming. If there are First Nations that are interested in fish farming–and this is hypothetical; I am not tying you to any particular–that would be interested in establishing fish farming, this operation would have to be located off reserve versus on reserve before the corporation could deal with it. Is that correct?

Mr. Enns: Yes, that is correct.

Ms. Wowchuk: Mr. Chairman, there are many other issues we could discuss under this one, but the staff is very co-operative when we have particular issues. I have always been able to call the staff and get answers to questions, so if there is any that I have not gotten this time, with the minister's permission I will call staff and get answers to those questions.

Mr. Chairperson: Item 3.3. Manitoba Agricultural Credit Corporation, Administration $3,547,900–pass; Net Interest Cost and Loan Guarantees $1,800,000–pass; Provision for Impaired Loans $800,000–pass; Special Farm Assistance $100,000–pass; Flood Proofing Loan Assistance $1,418,800–pass; Manitoba Producers' Recovery Program $1,788,600–pass.

Resolution 3.3: RESOLVED that there be granted to Her Majesty a sum not exceeding $9,455,300 for Manitoba Agricultural Credit Corporation for the fiscal year ending the 31st day of March, 2000.

Now where would the honourable member for Swan River like to go?

Ms. Wowchuk: Mr. Chairman, earlier we had agreed that we would go till about quarter to six, so I would like to just ask some questions about the AIDA program, if that would be possible.

Mr. Chairperson: Okay. So we go back then to item 3.8. Agricultural Income Disaster Assistance program. The honourable minister maybe would like to introduce some new staff here.

Mr. Enns: I am joined by senior member of staff Mike Lasiuk, and, of course, Craig Lee has been with us up here before. Mike crunches the numbers for us on these issues.

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Ms. Wowchuk: When we first got into this situation where farmers were in financial difficulty, we knew that we had to have some kind of support for them and all farm organizations had been calling for support. We have had discussion for a long time about long-term safety net programs, and we were waiting to hear what the program was. Yesterday, in the House the minister talked about my support for the program. I was really thrilled to think that I had that kind of power, that by saying the government should follow Saskatchewan that I actually had an influence on the minister signing onto this program. But I realize full well that it is people with a lot more power than me that have helped the minister make his decision on this program.

Given that the minister and farmers across the country have indicated that there are real problems with the program, I would like to ask the minister what role his staff had or who was Manitoba's representative in the drafting of this program and what influence did the government have in making changes or developing the program.

Mr. Enns: As the Premier (Mr. Filmon) has said on different occasions, it is perhaps not quite correctly when he says we had no input. Certainly our senior policy person, Mr. Craig Lee, was the point man from Manitoba that was involved in the development of the program. We were presented, in essence, with pretty basic program in place that was to some extent, and I am not fully familiar with it, modelled after the Alberta FIDP program, which I understand was introduced right about the same time that Peace River faced a very serious situation of upwards of 700,000, 800,000 acres of unseeded land with no appropriate insurance or other programs coming to their aid.

In essence, the program should work. It has a fairly straightforward and understandable principle; that is if a farm's income, we are talking a whole farm now, if the whole farm income drops below 70 percent of a three-year running average of the previous three years, if it drops to 65 percent, then this program will top up that, will bring it up to 70 percent, will top up, provide that farm with whatever it takes, $5,000, $10,000 or $30,000 to bring it up to 70 percent.

That on the face of it sounds like it should be a good program, and certainly the Canadian Federation of Agriculture and the Keystone Agricultural Producers organization have all, by and large, supported it. I remember the former outgoing president, long-time president Jack Wilkinson from the Canadian Federation of Agriculture was a very strong proponent of this program, and my colleague the member for Provencher is a very strong supporter of this program, I believe. [interjection] Oh, you are not from Provencher.

An Honourable Member: No.

Mr. Enns: Where are you from?

An Honourable Member: La Verendrye.

Mr. Enns: La Verendrye, pardon me.

An Honourable Member: You have promoted him to the federal House.

Mr. Enns: Okay, I had the federal House in mind.

But for a number of different reasons it has flaws in it, and one of the flaws, of course, is–and I am concerned because if the design of safety nets, if we are moving to this style of a program, for instance away from the kinds of programs like basic crop insurance, then I get very concerned. One of the basic flaws is that that 70 percent figure is based on your last three years average. Well, if you had three very average or mediocre crops or farm performance in those three years, 70 percent of nothing is still nothing, and that is what some of our farmers are facing right now.

You have a group of farmers in the Grandview area, this is a third successive year of just really very little. Now, it is small comfort to them to have myself or the federal minister saying, but we are going to give you 70 percent of what you got on average over the last three years. That is what causes me difficulty, and that is why the farm community was not as receptive as they might have been expected to be to the federal minister's announcement yesterday in Brandon.

But at the same time we have, as a government, committed–and it was not an easy thing to put the numbers together, because for staff it is very difficult to estimate exactly what the requirements would be, and treasury boards want to know a little more precisely what it is that we are asking for, so we had ranges that ranged from $12 million to $27 million to $30 million. In any event, we came down as our share of this program as being in the order of $62 million; the federal share, 60 percent, $90 million. There is $150 million meant to help farmers' income when they are in trouble.

And I am insisting that we find some way in a more direct way and in a more universal way of applying that. As you know, I threw out the suggestion that we try to shape that into an acreage payment based on unseeded acreage out of these AIDA funds, and I am determined to try and do that. Now, senior officials, Mr. Lee particularly, is the one who is charged with the responsibility of trying to get that in shape with the federal authorities.

Ms. Wowchuk: Given that each province has their own annex clause to the agreement, is it the view of the department that there is the ability of one province to move to have their funding come as an acreage payment of unseeded acres early and then have the follow-up on the balance paid out through the normal process of the application, or, if you do that, do you put the program at risk and risk losing the funding? Certainly this is a pot of money that is set aside for disaster assistance for farmers, and we do not want to lose that pot of money. So do you feel that you have that ability to make those kinds of changes to allow for the acreage payment now–of course, the money would not flow until September or October anyway–and still have the rest of the population apply through the normal process?

Mr. Enns: We believe we can do it. You know, it should not be interpreted as a green light or approval from Ottawa that they will let us do it. There are some concerns that, if we are providing what amounts to an acreage payment to a significant group of our producers for unseeded acreage and allow the rest of them to do the regular application for the AIDA program, we do not have two applications for one. That would be unfair to everybody. There is the ongoing issue that whenever we talk–that is why I want to–it is important from my point of view to keep it within the concept of the AIDA program, which, if you recall, is based on whole farm income, not a specific thing.

My deputy minister advised me that, if we start specifically talking about an acreage payment, then the trade people start pricking up their ears and asking about the countervailability of it and the trade agreeness of it. Although I have, and I continue, as I said to the Minister Lyle Vanclief in Brandon, to have a great deal of trouble: how come a modest acreage payment triggers a trade war if we are thinking about it, and a $70-, $80-, $100-acre payment triggered by their preventative planting program is not considered a trade item. Somebody has to explain that to me. I mean, it is not a provincial issue; it is a federal issue. But I raise it just because there is that concern. That is, while we may want to call it an acreage payment, it is a payment out of the AIDA program.

I will give you one little example that the department modelled for me, for instance. A 1,200-acre farm that has 50 percent seeded–there are going to be a lot of farms like that, 30 percent, 40 percent, 50 percent seeded–under the model that my department used, it could qualify for an AIDA payment of up to $42,000. Now that is a pretty significant support payment. If I applied a per acreage at $25 an acre payment to that, with the 600 acres on that farm that are not seeded, that would amount to a $15,000 payment now, and then he would get the balance, that 27, paid when he concludes the AIDA program next taxation year.

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Ms. Wowchuk: Certainly the whole issue of acreage payment in Manitoba or Saskatchewan, which is much needed, might cause trade wars does not make any sense when you hear what the people south of the border are getting. I understand they are getting somewhere between $60 and $70 a payment. I do not understand how they can make payments, and for us to make them will result in a trade war. But that is something for other people to deal with.

I want to ask the minister given that our share of the program for this year should be somewhere in the range of $26 million, we anticipate that should be the amount that Manitoba's share should be, why is it that the government only budgeted $12 million for the program in this particular year?

Mr. Enns: Again, we simply do not know. Under the AIDA program, we have something like 900 applications in–[interjection] A thousand applications in. We have processed about a hundred. The average claims across Canada is about $22,000, so that is a relatively modest draw on that program. This is now well into June. Certainly, you would think farmers would be filling out their programs, and the cut-off date is July 31; so we have about another month, a little over a month to go. I had the request from the Department of Finance: look it, Mr. Minister, do not print more than you need because it has a way then of showing up in our overall budget figures.

Also, the accommodation by the federal government that they would pick up the full costs of the first year, a hundred percent of the cost of a full year, and then we would adjust it in the second year meant that it did not really matter what I printed. We are committed to $62 million, $90 million, 60-40 sharing of roughly $150-million program. In fact, if as a result of this year ongoing low commodity prices, the troubles that we are having out there, we have a very heavy draw on there and it exceeds that amount, then we would have to consider prorating, paying only 80 percent or 90 percent of the claims.

Ms. Wowchuk: The minister indicated that the federal government is going to pay all the costs this year. They are going to pay it all and then we would have to pay back the following year. So in actual fact, $12 million may not go out of this year's budget, but in next year's budget we could end up with somewhere in the range of $50 million in this line.

Mr. Enns: Yes.

Ms. Wowchuk: Why was that decision made to not show any of the expense this year and carry it all forward to next year?

Mr. Enns: Well, Mr. Chairman, I think when we first looked at Manitoba's share on the first year, it ranged between $12 million and $24 million. It seems to me I saw that range of figures, and we chose to use the lower figure. I still say and I could be proven wrong that I think quite frankly some of the discussions that I have had with Minister Vanclief is that, after having made a great to-do about the massive $1.5-billion Farm Aid Program that is provincial and federal together, right about now he is expressing some concern about it not being taken up, not flowing the money. He is considering–at least we heard him say that yesterday–some major changes, modifications to the program. If negative margins, for instance, are included in the program, that could be a major change to the program. It could flow quite a few more dollars into that program.

But at budget-setting time, here was the program, I looked at it and I felt reasonably assured that the figures, even the $12 million that we put in for our provincial share, would cover the actual take-up on the program. I still have to be proven wrong. I will be proven wrong on July 31 maybe or the end of the year, too, of '99.

Ms. Wowchuk: But it does not matter what number you put in it this year, you are not going to pay out any money out of it because your payment has to go to the federal government next year. So what we are going to have to see if there is a big take-up is then a big bump in the Agriculture budget to cover those costs next year. Is that correct?

Mr. Enns: I am really not so certain. For instance, if we persist in doing as my heart feels I want to, provide an acreage payment based on unseeded acreage, and I do not get the co-operation from the federal government, we may just do that and consider that as part of–say, it costs $18 million or $20 million. That is $20 million, but that is our $20 million of the $60 million that we are committed to. Then we have $40 million left for AIDA. Would the member support me if I did that? You would have to think about that a little while, eh? Have I ever misled you? Have I ever told you something you could not believe in?

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Ms. Wowchuk: So then in reality there is $12 million that is in the Agriculture budget that will not have to be paid out for AIDA this year, that should the department make some decisions, that is money that might be able to be used for a program such as the minister has talked about, the $25-an-acre payment.

Mr. Enns: I would call that being very much of AIDA.

Mr. Chairperson: Is it the will of the committee to call it six o'clock? [agreed]

The time being six o'clock, committee rise.