Proceedings of the Standing Senate Committee on
Foreign Affairs
Issue 9 - Evidence, May 1, 2001
OTTAWA, Tuesday, May 1, 2001 The Standing Senate Committee on Foreign Affairs met this day at 6:07 p.m. to examine and report on emerging political, social, economic and security developments in Russia and Ukraine; Canada's policy and interests in the region; and other related matters. Senator Peter A. Stollery (Chairman) in the Chair. The Chairman: Honourable senators, I should like to make a brief introduction of Senator Tunney, for the record. Senator Tunney is a fourth generation farmer from North umberland County, Ontario, and has been a dairy farmer for at least 30 years. For 18 years he was a director of the Dairy Bureau of Canada. For 12 years he was a director of the Ontario Milk Marketing Board, representing farmers in six counties, including Northumberland County. The part that is relevant to our interest is that from 1993 to 1998 Senator Tunney volunteered as a consultant to the dairy industry in Russia and Ukraine. Senator Tunney consulted in regards to the areas of farm and processing operations and in the establishment of farm marketing boards. He was also a guest lecturer at the agricultural college in Kharkov. Honourable senators, I know you are aware of the potential in Ukraine, which is known for its enormous grain production before the First World War. It is an area that is historically important for agricultural production. I read figures the other day on the history of Ukraine that indicated that in 1910 approximately 72 per cent of the world's barley production came from Ukraine and upwards of 60 per cent of all the grain produced in the world came from Ukraine as well. In fact, Odessa was built as the export port, along with the railway, to service this grain producing area. Hon. Jim Tunney: Mr. Chairman, first, I will mention that I did prepare for this presentation somewhat by taking a topical article out of the last issue of Country Guide (April 2001), which includes a story on a gentleman from Alberta who is working in Eastern Russia. This is an area where I also worked when I was in Russia, and it is called Samara. I have also included four reports written during the time I spent in Russia and Ukraine. They are there for your interest or reference. I would have preferred to have had them delivered to the honourable senators a week or so ago, but I did not know about this event at the time. I wish to state a few statistics before we turn the lights down and put something on the screen. Russia has a population of 151 million people. Canada has seven persons per square mile. Russia has 22 persons per square mile. Russia is the largest country in the world. Canada is the second largest. To make a comparison, there are 6,600,000 square miles in Russia - and that is Russia alone, not the satellites - while Canada has 3,800,000 square miles. Therefore, Russia is almost twice as big as Canada. Honourable senators, there are 11 time zones in Russia. If you look at the map on display, you can see that all of the green area represents the country of Russia. It is getting dark on the western border while it is coming on daylight in the Bering Strait. They are never without daylight in Russia. The climate of Russia is very much like Canada's. They have Siberia and we have our Arctic. In the southern part of Russia they can even outdo us in climate and in production of tender fruits, et cetera. I wonder when and if it ever will happen that they get their act together to start to produce some of these things. Russia has by far the largest proven reserves of gas and oil in the world, including Kuwait and Venezuela, and yet, they are out of fuel every day. Their refineries are broken down, their fuel is not properly refined, pipelines are broken and sometimes they are pumping raw oil through a six-inch pipe. In one case, the pipeline went across a lake and it continued to pump. The oil overflowed into the lake, and no one was there to deal with the situation. In minerals, Russia has iron ore, coal, bauxite, magnesium, manganese, lead, zinc, copper, platinum, gold and diamonds. It has the second largest diamond supply in the world after South Africa. It also has tungsten, amber, salt, natural gas and asbestos. There are actually too many minerals to mention here. In Russia there are 39 million dairy cows. We have 750,000 in Canada. We double their milk production. Their cows give between four and six-pounds of milk a day, and our cows are now averaging between 75 and 80 pounds a day. They do not have proper cooling for the milk so half of it is dumped because it is not fit to process. They make only one variety of soft cheese. The cheese processing plants are running at one or one and a half days a week. The culture in Russia is unbelievable in that the people are poverty stricken but satisfied. It is surprising to find how civil Russians are. In fact, when I arrive there I like to demonstrate a bit of humour. They ask me why I laugh, talk and smile all the time. I tell them that perhaps I have more to smile about than they do. They ask me why Canada is so wealthy and why are they are so poor. I tell them that our country did not get blown up in two world wars. More importantly, we have never had the kind of political system that has crushed them for 70 years and they acknowledge that. The Russian people ask whether they will ever be as wealthy as Canadians are. They are beginning to discover the wealth of other Western countries. I have told them that if they could organize a political system that is free of the Mafia they would be surprised at how quickly their economy could turn around and how prosperous they could be in a very short time. They need to get people doing the things that would help the country recover. If we consider post-war Germany and Japan, which were two countries that were torn apart, we can see how quickly their economies recovered. Considering all the resources it has Russia could easily become the wealthiest country in the world. The problem is that their management, of course, is disastrous. The Mafia is bleeding off anything that is worthwhile and they do not intend to give that up. Ukraine has 40 per cent of the world's agricultural class one soil. They could feed the whole world if they could ever get some wind under their wings and start producing the way that land is capable of producing. Imagine this: The land in Ukraine is as black as coal. Not a pebble to the acre, and it is as flat as this floor. The fields encompass anywhere from 1,000 to 5,000 acres of land. When you drive down an old dirt road, it will be the same field on either side of the road for five or 10 miles, and the fields then extend right to the horizon. They never get all of their land planted in the spring because they run out of seed and fuel. Then their tractors break down, and they never get it all harvested. When the crops are harvested they store them in old warehouses. Half of what they harvest is lost to weather conditions because the roofs of these old buildings are collapsing. The grain is moulded into one solid block. I was in one old warehouse where there were between 800 and 1,000 tons of potatoes. That was in December and it was 25 degrees below zero. These potatoes had been harvested in September and were frozen and moulded into one solid block. One of the thrusts for me is to help these people establish an organization that would include farmers who would see to it that production is moved from the farms and into the towns and cities. The people in the towns and cities are often on the verge of starvation. The people in the country are well fed. They see that they are fed before anything goes to town. They do not know anything about a marketing board and yet they want to know about such things. A marketing board such as we have in Canada could be a farm organization like the Federation of Agriculture. It could have a marketing component that would make certain people responsible for moving this production. Cabbages are a big item. Everyone lives on cabbage over there. I had cabbage three times a day on each trip I do not like any kind of cabbage at any time! Senator Graham: How many times have you been to Russia, Senator Tunney? Senator Tunney: I have been there seven times. Each stay has lasted for about two months. I am essentially responsible for helping them with their livestock. I am a dairy farmer. I know how to manage cattle. I take about $1,000 worth of veterinary supplies when I go. I go right out and work on the farms in the barns with the workers. I test the cow's milk for mastitis and I know when it is "mastitic". I treat the cows for mastitis and I dehorn the little calves because they don't have any "dehorners" of any kind. Cows grow long horns and they fight with each other. Pneumonia is rampant over there because of poor housing. When I go into a barn and I see 40 or 60 head of young stock that are dehydrated with their eyes sunk back in their heads and they all have pneumonia, I can treat them. I needle them. I show the farmers how to do it. The next day, I insist that they do it. Then they can do it themselves because I leave them the supplies. Believe it or not, every farm has a so-called veterinarian, and he does not even have a syringe or needle, let alone any kind of treatment. In Russia they have about 39 million dairy cows. In Canada we have about 750,000 dairy cows. We produce more than twice as much milk with 750,000 cows as they do with 39 million. That is a shocking statistic. Part of my work over there is to record milk production and show them how to improve it. Mastitis alone will cause a 70 per cent reduction in a cow's production. Mastitis is the inflammation of the mammary system. The milk is then not fit to drink. It does not even taste like milk. I never get a drink of milk from the time I leave Canada until I get back again. They make one variety of a very sour soft white cheese, but you can never get a drink of milk. They do not have fluid milk over there. This next slide shows a map of Ukraine. Canada is 16 times the size of Ukraine. Ukraine goes from the border with Poland to the border with Russia. I have worked in the whole area of Ukraine. They have soil and land that could be very productive, but they do not have any plans for keeping or saving their seed. When they plant in the spring they do not have enough seed. They are out of fuel every day. The refineries do not properly refine the fuel. That plays havoc with the tractor's motors. At any time of the day you can see 10 tractors out in the fields that have just quit working. The next slide shows Red Square and you can see St. Basil's Cathedral. This slide shows the planning building which is the government's business building in the city. The plans for the whole country, for everything that moves, are made in the planning building. Decisions concerning farms that can be up to 2,000 miles away are made in that building. Some 25-year-old fellow, who has never been on a farm in his life, is seconded to farm planning. St. Basil's Cathedral was finished in the year 1071. Stalin ordered it to be demolished in 1936. The people were so devastated that they raised enough money to bribe the workers not to destroy it. They did do a lot of damage inside, but the people went in and took out all the icons, precious paintings and statues. They hid these things in their own homes for 70 years. When I was first there, just after the collapse of communism, they were redecorating the interior and people brought back all of the icons to put back in the cathedral. It is absolutely beautiful. It is astounding. This next slide shows the only Catholic church left in Moscow. They used to have over 40 Catholic churches in Moscow. However, Stalin, followed by Khrushchev, ordered their demoli tion. There is only one left. I go to mass there when I am in Moscow. That is a cathedral in Kiev, Ukraine. It was built and completed in the year 991. It looks brand new. We are going on to the farm slides, but before we do, here is one more slide that is interesting. I put it here just to show you how they can never get anything right. This is a little bathroom in an old broken down hotel that I stayed in while in Eastern Ukraine. If you look closely, you can see the water tank on the extreme left. It has a black hose coming out of it. The little flap that stops the water was tied with a piece of very hard plastic cord, and it would never close. It ran full flush 24 hours a day. I undertook one day to fix it, and I did, but it took me an hour. The people thought that was great but would never think to do it themselves. Anyway, they do not have iron, copper or plastic piping available. What they have used for the water tank is hydraulic hose from old tractors that stopped running years ago. They use that for plumbing. They do not have hose clamps, so a piece of rusty wire is used instead. This will not tighten it up, and so it just sprays 24 hours a day. You go into the bathroom and everything is soaking wet. When you want to shave, you need a mirror, and if you look up on the wall you see a little shelf and a little mirror behind it. The problem is that to see and use that mirror, you have to stand with one foot on the floor and one foot in the tub. The reason is that the people put the mirror up before they had to put the tub in, so there was no planning about where the mirror should go. All these little old houses are government houses, and the workers on the farms live in them. Each farm of 30,000 acres has about 140 workers. If they are not working they are put out of the houses. If they are put out of the houses they have no place to go because no one owns a house. They live in them at the pleasure of the managers, the apparatchiki. I worked in this area. You are looking at the Caucasus Mountains. There are hundreds of thousands of acres of beautiful land in this valley. I was there in 1993. I left in late December and two weeks after I left the first Chechen war broke out. It tore at the city of Grozny and just turned it into rubble. My best friend on that particular farm was killed during the war. Stalin's idea was everything is big and everything is the same size. Every farm has an administration building and an administration. This farm director probably had served some time in the army, so he got a reward. He got the reward not because he knew anything but because he had been in the military. He has about eight specialists, one in charge of cows, calves, machinery, crops et cetera. They never go to the farm or to the barn. Each of these administration buildings has about 20 offices. They have probably 10 or 12 secretaries. However, they still do not have anything like a calculator and certainly none of the offices has a computer. They have the abacus. You should see those ladies use those things. They are professionals at it, and they can add, multiply, subtract and come out with figures you would not believe! That is a little TV station in one of the little villages. They do not have networks but just a local TV station. This girl knew I was coming there because I had to do an interview. She wrote letters to six of her friends here in Ontario and gave them to me and asked if I would post them when I got home. I did that for her. They are a very cultured and musical people. This is a lovely music school that unfortunately closed down because of lack of funds. Here is a wild boar. A friend of mine wanted to know if I could go with him to hunt wild boar, and I said sure. The day we were to go I was out of commission with a bad back from wrestling and needling cattle, so he went alone. He got this 800-pound wild boar. He shot it not for sport but for food. He used a winch attached to a six wheel drive army truck and brought it back home, cleaned it up and shared it with all the people in the village. They are wonderful people for sharing and being generous. I have to admire them for that. There are the tusks out of that wild boar. I have them at home. They have many war museums, and are deathly afraid of war. They keep asking me if Canada would attack Russia. Well, why would we? We fought on their side in two world wars. If they were attacked, we would be on their side. Senator Grafstein: We did invade Russia in 1917. We were part of the invasion force. It is not true we always fought for them. Senator Tunney: Here is part of a museum, a war memorial. If you look closely at it, you will see the figure of bombs coming down, and you will see the figures of doves. The doves represent the spirits of the soldiers leaving their bodies. In the Second World War, in early 1943, when the Germans invaded, a three-day tank battle was fought on a high elevation above the little town I was in. On the afternoon of the third day, the allies, Russia and Ukraine, ran out of ammunition. The Germans moved in that afternoon and slaughtered 1 million Russian and Ukrainian soldiers. There were 1,000 tanks on each side. Senator Grafstein: Where is that? Senator Tunney: This slide shows a high elevation, just east and south of Kharkov, a little town called Izmiov. These red things are exploded bombshells; you can see how they have been blown apart. This slide shows a cemetery where 1 million soldiers were buried in common graves. That is a typical European cemetery. They allowed them to put up monuments with a picture of the deceased embedded in the stone. They also put up these little fences to section them off. The next slide shows a farm. The barns are 450 feet long and tie up 250 cows. They were all built by Stalin in the 1930s and have not been upgraded since. The milking equipment is long beyond any practical use. They are feeding here on both sides. The barns have a wide door on each end, so they drive the cows through and they feed to either side. That barn is 60 years old. The horses look like they are also 60 years old too! This work is done three times a day and all by hand. More than that, the men do not do that kind of work; they are above it. The women do all the work. The men drink vodka and smoke cigarettes from morning until night. They go out and drive around and visit with each other. The women go into those barns, four women in each barn, at four o'clock in the morning and do the milking until 9 a.m. Then the cows begin to feed. At four o'clock in the afternoon, the women start milking again. At nine o'clock, they are ready to go back to their little homes. They do this seven days a week and are never paid anything. This slide shows the cows with long horns. When they let them out, the cows fight. They play to start with, then they lose their tempers. Then they fight and rip each other's sides open because of these long sharp horns. This slide shows the typical four women milking cows. The next slide shows that the cows are so dirty that they are not really fit to milk or to take milk from. Sanitation is just terrible over there. This slide shows the interior of one of the barns. The fellow on the left is my friend who was killed in the war in 1993. In the next slide you can see the women feeding these cows out of buckets that use to be manure buckets. They are now using them for grain and feed. They feed on both sides. This slide shows typical peasant workers on the farm. I used to see them every morning. I would go up and shake hands with them and talk a little bit of Russian, enough for them to understand. Then I took a photo of them. They thought they had died and gone to heaven. They had never been photographed before. They told me that. They were so pleased and of course I left the photographs for them. This slide shows a pen of about 60 heifer calves. When I went in there, they were all deathly sick and there were several dead ones outside. I said, "These calves have all got pneumonia." They were dehydrated and their eyes were sunk back in their heads. I said, "I have to go to the van and get my drugs." I sensed that they did not know what I meant. I said, "I have to go and get my antibiotics." Right away they knew what I meant, because the word antibiotic is pronounced the same way in Russian. I needled about 60 calves that morning. The next morning I said, "We have to go back and needle those calves." They said, "Oh no, you did them yesterday, that will be all right." I said, "Well, what we did yesterday will be wasted if we do not follow it up with another shot." When we went into the barn on the third morning those calves were all up and feeding at the manger. The Russians could not believe it because they had expected that half of the calves would be dead. Those calves would have died if they had not had a needle. They were that far-gone. The farmers had never had antibiotics before, so the impact was far greater. The sad part is that the government is of no help. The government has no interest in agriculture or in helping these people. The government is their enemy instead of their support. That is hard to believe, but it is so. The government people, staff or representatives, seem to have no interest in poor people. They have no interest in the farms becoming more productive or prosperous. I had two of the fellows over to my farm. They were from Eastern Ukraine. They had 10,000 hogs on their farm. Orders came down from Moscow to increase that number to 100,000. When I got there six months later, in February, they had increased the number, as they were ordered, to 100,000 hogs. While I was there, hog cholera broke out and 70,000 hogs died. They had brought hogs in from all over the country and it takes only one hog to infect the others. The farmers did not even know what hog cholera was. This slide shows me dehorning a calf. I take these small dehorners over there with me. They are very cheap and easy to use. I dehorn the calves when their horns are about an inch long or less. I pull their little arteries to stop the bleeding, apply some blood-stop, which is a powder, on the wound and the next day they do not even know it has been done. Dehorned calves will never grow a horn again. The farmers think that is just wonderful. They had never seen dehorners before. Senator Graham: How do you get the dehorners into the country, Senator Tunney? Senator Tunney: I obtained special permission from Customs, Health Canada and Agriculture Canada to purchase and take these items with me. Customs then sends a communication over so it is known what I have with me. Senator Graham: Is that the same with the antibiotics? Senator Tunney: Yes, it is the same system with the antibiotics. I have never been challenged or stopped anywhere. The next slide shows me testing the milk taken from one cow. The tray contains four saucers. I take milk from each quarter of the cow, add some reagent, which is a purple liquid, swirl it around, and right away I can tell whether or not there is mastitis. When I see mastitis I use an intermammary treatment. I squeeze it into the cow's teat through the orifice, then massage the udder to make it active, and in four or five days the mastitis is cleared up. In a month's time that cow will give four times as much milk as she did before I treated her. When I can persuade the farmers to cut their hay in June, when it is 18 per cent protein, instead of in August, when it is 4 per cent protein, it will quadruple their production. I make sure that I get reports from every area that I work in to evaluate the benefit. If there is no benefit I do not go again. If they try to do what I persuade them to do, they are always quite surprised with the impact. Another serious weakness is their method of milking the cows. This is woman's work and they have never had any training on proper milking techniques. If a cow is giving 36 pounds of milk at a milking here in Canada, you put the milker on that cow for about two and a half minutes, three and a half at the most, and that cow is all milked out and you must get that milker off. With the last little bit of milk get the milker off otherwise the action inside of the teat will cause mastitis. The Russian women will put a milker on a cow and leave it on for 15 minutes when the cow will give only two-pounds of milk. I was on a farm in Western Ukraine where the women milked the cows three times a day. Some of our farms here do that, but these are farms where the cows are producing over 100 pounds of milk a day. We have cows here in this province that are giving 140 pounds of milk a day. The women leave the "milkers" on those cows for that long. I asked one director how often he milked his cows. He told me three times a day. I had to laugh a bit. He looked at me and said: "I suppose you think that twice a day would be often enough." I told him that, with the amount of milk the cows are giving, twice a week would be often enough. That is the same gentleman who told me a dramatic story, which I will share with you. I was on this farm that we are talking about and I asked to see the cows, the barns and the milking equipment, I also said that I would like to drive around and see their farmland. We did all of those things and he took me to where there was a small church that was fairly new. He proceeded to tell me the story of the church. In 1957, Khrushchev ordered the Russian army into that area to demolish any churches and any signs of the practice of religion of any kind. The army came and demolished the church. The commander of the unit got leave to go back home to Moscow and at that time his wife had given birth to a new baby. The baby was totally blind and the commander immediately concluded that he was being punished for his actions in Western Ukraine. He went right back into that neighbourhood, right to that site, and ordered his soldiers to build a new church. Then, when he went back to Moscow on his next leave, the baby had full sight. The tears were flowing down the farmer's cheeks when he told me this story. We went to a place for dinner that had once been a hog barn and had been converted into a restaurant. Two women were preparing our meal. One of them brought each of us a 26-ounce bottle of vodka. That is typically how you start your meal. Then they pour you a shot glass full of the vodka. I do not care to drink vodka but when I took one sip they filled up my glass again. One of these women suggested that she would like to come back to Canada with me. I told her that it might be a good idea but I was not sure how she and my wife would get along! These cows in this picture are a breed that is probably 1,000 years old. The breed is called "Red Steppe" and they are good for neither dairy nor beef farming. Many of the farms run out of feed halfway through the winter. They might have as many as 800 head of cattle. They just slaughter them all. They have no other option. Senator Graham: I have a question on that point. What would be the acreage for the 800 cattle? Senator Tunney: Thirty thousand acres. That is the standard size farm and standard numbers for livestock. Senator Corbin: Senator Tunney, what happened to the Canadian Holsteins sent over there to improve the breed? Senator Tunney: That is a good question, and one I should never fail to remark upon. I can remember planeloads of purebred Holsteins from Quebec, Ontario, and the Maritimes going to Russia. As I said, they will run out of feed halfway through the winter. They cannot buy feed from anyone else, because no one buys or sells, so they slaughter the purebred Holsteins. We do not do that any more. We do however, in quite an aggressive way, sell embryos and bull semen. There are some exceptionally good mixed breeds, because they start with the purebred Holstein. Two or three generations of Holstein, one after the other, will improve the breed. There are some farms that are doing extremely well. The Russians have only one size and style of tractor. These tractors are made in a factory in Minsk, Belarus, where there are 40,000 employees. Their manufacturing style and methods are beyond reason. They manufacture every single component that goes into the making of any machine, whether it is a combine, tractor, truck or other machinery. That is their style. They manufacture everything, from the frame to all of the instruments, in the one factory. However, it does not work. There was a poor old guy standing beside that piece of machinery from sun-up until sundown. He had been sent out to start up a diesel crawler, but it would not start, because it was awfully cold. However, because he was sent there to do it, he was still there, from 7:00 a.m. until it was dark. He could not go back and say that the damn thing would not start, and that he would not waste any more time on it. He stayed out there because he was told to. There was a collection of old, worn out tractors. Someone found some blue paint and painted all of the tractors. They thought they would sell them to Saudi Arabia. The Saudis were too damn smart for that, and the tractors sat there for years. I am sure they are still there. They are all four-wheel drive tractors, and I never saw one with the front drive shaft still in it. They turn them from four-wheel drive into two-wheel drive, because there are never spare parts made for them. You cannot find a bearing, a seal, a universal joint, a hydraulic fitting or parts. As a result, they just park them, and no one ever gives it another thought. They will stay there forever. There is another farm in Russia where they make their own combines; there are 15 of them. They are called DON1500. Of the 15, only two of them work. They had spent several years pulling parts off the others to keep two of the combines working. That is how they manage. There was a big stack of electric motors where they hoped to find bearings and seals to fit the machinery; but they never, ever fit. The farms are so poverty stricken that every day the director of the farm looks and lobbies for enough money just to get through the day. He appeals to the government or to the regional director or to anyone who might help him out. Senator Grafstein: As I talked to Senator Tunney before this meeting, I found that the agricultural situation in Ukraine and Russia reminds me exactly of the situation in China. I am referring to the most poverty-stricken regions in China before the agricultural revolution. If you visit China today, you will find poverty-stricken regions such as the Szechuan province where there are 10s of millions of people. That was where all the experiments took place. The Chinese came up with a brilliant model that dramatically improved not only the subsistence farming, but also developed excess capital. These collectives, located all through the heart of China, turned around the viability of the farms. The government's objective to keep these large populations on the farm, and not drive them into the city was successful. There was a system called the Special Responsibility House hold, which was a simple system, in a way, and quite brilliant in another way. It attributed to each collective farm a flat price for its product. Each of the products was measured and it was determined that, the farm had to produce a specific amount of product for the state. The price was fixed. This product could be milk, chicken, rice et cetera. They established, in effect, government-bought prices. Anything above those quotas was then available for the free market. The more productive areas quickly developed quite a rich series of resources. Ultimately they moved from subsistence farming to competitive agriculture. With the excess dollars thus generated, they then began to develop small manufacturing operations on these farms. The last time I travelled through China, I found that the most important manufacturing operations were brick companies. This is because all households had converted from mud huts to brick houses complete with electrical equipment. Ukraine has a higher level of literacy and there are engineers, scientists, et cetera. How is it that they have not been able to take their basic skills, which are higher-level skills than those that I saw in China, and achieve a subsistence localized system? They have such rich agriculture areas. Someone said that the raw material in Ukraine is the richest and has always been among the best in the world. What is wrong and how can Canada help fix it? We went through the same problems with supply management, but we did two things: we developed some government systems, but we also developed skilled agricultural centres, not only of excellence within the government both provincial and federal but also through agricultural colleges. Senator Tunney: I am aware of this. In China, there was a system of regimentation that kept everything moving forward. Russia-Ukraine was far better off under communism than they have been since. The reason is that when the KGB was disbanded, there was nothing to take its place. The Mafia broke out everywhere, and the Mafia control the economy and the political system. There is no doubt about it. Read The Globe and Mail of the last few days and you will see what is happening in Kiev, Ukraine, where Mr. Kuchma is accused of having that reporter assassinated. They have sacked the Prime Minister, Mr. Yushchenko. A sound, western-educated reform-minded person is going to run against Kuchma next fall. That is the difference. Ukraine can never get anywhere. I have no interest in the political system over there, because I will never be able to do anything about it. However, perhaps we can help improve the rural economy and the industry of agriculture. In doing this maybe it will be a signal to the political side to tackle this problem and make something worthwhile of it. The Chairman: I have a question in the same vein. Do you see much of a difference between Ukraine and Russia? After all, they are two different countries. The agriculture sector obviously is a fiasco in both, but is it a bigger or lesser fiasco in Ukraine or Russia? Senator Tunney: One could move back and forth between the two and not distinguish any difference. I saw in Western Ukraine 80 men with scythes cutting a 100-acre field of hay. Most of you do not know what a scythe is. Their machinery, mowers, hay bines and equipment for cutting hay are long gone, so they use scythes. The scythes have long lost their wooden curved handle so they just cut a little tree about this size and wire it on to make a handle to cut hay. There were 40 men, all day long, morning to night, swinging a scythe. The Chairman: You have been going there for the past eight or ten years. Is it the same as it was when you started going? Has there been a slight improvement or no improvement at all? Senator Tunney: In some areas there is some improvement, but in other areas things have just deteriorated. What I mean by that is the currency problem. At one time when I was there inflation was 240 per cent. The currency collapsed in 1996. I was there just before and again just after it happened. The value of the ruble sank. It fell off so badly that the country was bankrupt and yet no one said it was. At one time Russia alone owed the International Monetary Fund $4 trillion and that was increasing. At the same time, Ukraine owed Russia $250 billion. That was because Ukraine did not have any petroleum, oil or gas. Russia has it all. That is what this war in Chechnya is all about. The devastatingly poor people are not benefiting in the least from the wealth of the oil and gas that is there. There is now a pipeline down into Italy through all of Western Europe selling petroleum and gas, but Ukraine has to buy it from Russia. The Ukraine is being penalized because it left the federation. Russia is holding it at ransom for the oil that Ukraine has to buy. The Chairman: As much as possible, I would like to focus on the agricultural sector because that is what we are supposed to be studying. Senator Graham: Senator Tunney, this is absolutely fascinat ing. If you have more to tell us, perhaps we should invite you back to meet with us. Senator Tunney, I am sure that you will probably be featured over and over again on CPAC. Senator Tunney: I could spend twice this much time again and not duplicate anything I have said. Senator Graham: My question is supplementary to the Chairman's question about the similarities between agriculture in Ukraine and Russia. I thought you made one distinction and that was the miles of black soil in Ukraine. When you talk about the black soil in Ukraine, is that black soil also prevalent in Russia? Senator Tunney: It is almost identical in most of the areas of Russia. It does not have the profile of Ukrainian soil or arable land, because it is found more in huge pockets instead of going from one side of the country to the other. The Chairman: There is plenty of this topsoil. We have all heard about the six feet of topsoil in Ukraine. It is the same then in many parts of Russia as well? Senator Tunney: Yes, it is. Senator Graham: You talk about the 39 million dairy cows producing four to six pounds of milk per day. Senator Tunney: Four to six pounds. Senator Graham: Yes, in two or three milkings, and you compare that with Canadian production of an average of 75 to80 pounds per day. If a million Jim Tunneys went to Russia, with all the antibiotics needed, could they turn the situation around with the present cattle? Or would have you to introduce a brand new strain of Holsteins or whatever to the country? Could you improve the cattle that are there now and achieve the production level that we have in Canada? Senator Tunney: One would have to do various things, all at the same time. The barns are passable, even though they are 70 years old. The milking equipment is long gone. It needs to be renewed. That is not a highly expensive proposition. There needs to be proper refrigeration to cool the milk. Milk will become malty in four hours after it is milked if it is not cooled and agitated. That it one task. You would have to plan how to do that. You could do it by using bull semen on the cows that they have. A much faster way, and this can be accomplished in one generation, is by selling embryos. I think you know how that process happens. You flush a purebred cow and mix the eggs with the semen of a purebred bull. You implant that into a host cow, one of those no-good cows, and from that you get a purebred Holstein calf. We already have the technology to sex the egg so you know whether the progeny will be a heifer or a bull. Of course, if you want to increase your herd, you choose females. That is a very fast way of doing it. In a nine-month period you have the calf on the ground. In 22 to 24 months, that Holstein heifer will have a calf of her own and be in production. Senator Graham: How many people are involved in agricul ture in Russia? Senator Tunney: As a percentage it is supposed to be around 60 per cent, although you will hear estimates of from 50 to 75. Senator Graham: How self-sufficient in food production is the country? Senator Tunney: We sell them $60 million worth of Prairie wheat every year. It goes by my farm 24 hours a day right now. Neither Ukraine nor Russia can feed themselves. They have been buying our grain for years. Senator Prud'homme: Yet they could. Senator Tunney: Yes, absolutely. They could be selling to all our other customers around the world. They could feed the whole world. There is no doubt about that. The Chairman: It is a huge fiasco in both Russia and Ukraine. It is very interesting that it is similar in both countries. We always heard that Ukraine was the huge producer of grain before World War I. If they get their act together, will they be a huge competitor of ours? Senator Tunney: I am fascinated by the fact that you ask that. We would be ever so much better off if they were our competitor. They say to me, "If you help us to the point where we are producing like we should be, it will hurt you." It will not hurt us. I was going to say this to conclude my presentation, but since you have broached the subject I will say it now. If we could help Russia and Ukraine get their economy back up and running like it should be, they would be Canada's best trading partner and customer for generations to come. We have over 1 million Ukrainian people in Canada, which provides a very traditional tie to the Ukraine. There are an awful lot of Russian people in Canada, mostly in the Prairies and the West. Most of these people are farmers. They are also educated people. These people hate the Americans with a passion. Without fail, when I arrive over there, they ask whether I am Canadian or American. If you are American, you are not so welcome there. I ask them why that is. They say that when Canadians go there as volunteers we help them more than they can imagine. When the Americans go there, they take over little companies, help to run them for five years, bleed them dry, and go back home again. They are much worse off after the Americans leave than they were before they came. They understand the American psyche. If we could help them get their economy back up to a decent level, they would be the best trading partners that we would have for at least 50 years. I will never ever see it, of course, and that does not bother me a bit. They ask why I am over there. I tell them that we could be the best trading partners in the world. They say that they would like that. It would take no effort whatsoever to establish trading relations with them. Canada provides them with a $100-million line of credit for the purchase of western wheat. They are usually overdrawn. Sometimes we have to hold a ship in Montreal or Vancouver until they can find some money to make a payment. With the better communications that now exist, they are beginning to find out what they have been denied and why. They are beginning to realize how we have been able to become so wealthy here. Senator Bolduc: You have talked about the perception they have of Americans and Canadians. How do they perceive the Europeans? Do they speak about the Polish, the Germans and the French? Senator Tunney: I have heard lots of stories and have had some personal experiences with that. The Netherlands and Germany had some very aggressive programs there and they lost heart. They gave up on it because it cost them a lot more than they were prepared to pay. They never really saw a long-range potential benefit. They quit and went back home. Senator Corbin: Senator Tunney, you talk about people in terms of "they." You have been telling us mostly about the operators of these former collective farms. Have you had the opportunity to talk with people at the managerial level or bureaucratic level? Have you detected any willingness to change anything? Senator Tunney: They have every intention of changing and every hope that things will change. Every time I go to any of those areas, I am invited to the regional administration office. They have a regional minister of agriculture who has a whole group of people working for him. I am always called to talk in sessions like this. I am asked to talk about what I see over there and what I know could happen. They are locked up because Moscow has no interest in cooperating, supporting or financing anything. They are about as heartbroken over the situation as I am. Yet, if I were a younger person, I would be delighted to spend the rest of my life in Russia or Ukraine. It is such a challenge and such a reward. There is no financial reward, of course, but that does not interest me. The reward is found in what you can accomplish. When things are as bad as they are, it does not take much effort to show some improvement. Senator Grafstein: We are searching for policy directives for our government. Part of our mission is to take a hard look at Ukraine and Russia and make policy recommendations to foster trade and economic relations with those countries. To focus on that for a moment, these huge farms, equivalent to 28,000 acres, are centrally run and are almost miniature agri-businesses without the notion of what agri-business is all about. What would prevent young Canadian farmers with excess capacity, from entering into joint ventures to run two or three of these things? This is assuming that they can get funding from the appropriate financial intermediaries in Europe and in North America. These institutions are there to help foster economic development in these agricultural regions. What is to prevent us from fostering or recommending joint ventures for our Canadian farmers who have excess time and capacity? Senator Tunney: I am happy to answer that question. Our young Canadian farmers are not in a financial position to do just what they would like to do and what you just suggested. I can do it because of my age, my financial situation and my determination to do it. We need more farmers like that. You do not need a lot of people, but once you get the right people trained, they are a smart people. They are as clever a race as I have ever met in my life and far smarter than I am. More than that, they are far more educated than I am. I never see anyone over there who has as little education as I have. Senator Bolduc: Formal education, you mean. Senator Tunney: I never went to high school a day in my life. I was farming when I was 14. I have grade 8. Education is very important to them. The problem is that the economy does not provide jobs for these 550 young, smart, eager, interested students. They are graduating from an agricultural college in the dairy science program. There is nothing for them to do because the factories and processing plants are either closed up or running only one day a week. There is really no future for them. They do not go to the cities. The city is to be avoided over there because in the cities you do not get fed. In the cities you run into all the crime. In the country you have the benefits of free food and free accommodation. The Chairman: I do not know that anyone has a prerogative here, but I will ask the last question and then adjourn the meeting. Senator Graham: Just one question. Maybe this happened before I came in, but just for the record, could Senator Tunney explain, if he hasn't already done so, how he became interested in Russia and Ukraine? The Chairman: He has not done so and that is a good question. Senator Tunney: My fault for not saying so at the start because I always get asked that question. I will tell you how it started with me. I have always been a volunteer. I am inclined to volunteer and some of my friends caught on to this. One of them was Glen Flaten, a farmer south of Regina, who was President of the Canadian Federation of Agriculture and also President of the International Federation of Agricultural Producers. External Affairs asked the Canadian Federation of Agriculture to coordinate a program called the Russia and Ukraine Agricul tural Development Program. It was understood that any partici pants would be volunteers. Glen Flaten phoned me from Ottawa late one night in August of 1993 and asked if I would go to Russia. I said let me think about that for a little bit and I will let you know. He said I hope you will agree. So I phoned him back after I had spoken to my wife. She said that the Russians needed help so badly that I should go. I went over there on maybe three or four different trips, both to Russia and Ukraine. I had to write a long detailed report on my return. They are in your red folders, four of them, I think. When I got back, they got some responses from over there and External Affairs thought it was such a good idea they wanted to keep me going. I said, sure, I will continue to go while I can manage it. And, that is how I got going. Senator Graham: How many cows are you milking on your own farm? Senator Tunney: Thirty-six to 40 cows. I have good help at home. I always have to have good help because I have been involved with these and other boards even before I began going overseas. The Chairman: The obvious question is will it get better? How long do you think it might take for improvement? I suppose it has to be land titles. They have to work out who owns the farms. What do you think will happen? Senator Tunney: Education is really the first requirement because they do not know how to buy, sell, negotiate or barter anything. They have never had a bank. No one has a bank account. I was buying and selling property and buying livestock when I was 12 years old. They at 50 or 70 years of age have never bought anything. They do not know how to manage it. They are afraid of free enterprise. When Gorbachov was Minister of Agriculture he set up 50,000 free enterprise privately held farms. The government loaned those young people money at 8 per cent, the next year at 14 per cent and the next year at 114 per cent. Revenue would never work with agriculture. Revenue presumed they were all wealthy by now, and after two years, wiped every single one of them out. You could not buy them to go into a venture like that again. It scared them. The Chairman: Something has to happen. Senator Tunney: Yes, it will happen. I am concerned. This is the fortieth time I have done this presentation. Each time I wind up the presentation I ask the Rotary Club or the church group or the school class if they believe in what I am doing. If they believe that Canada should and could do this kind of work I ask them to please write to their member of Parliament and the Prime Minister. I have had responses from the Prime Minister, members of Parliament and cabinet ministers. CIDA is the organization that should be in the forefront here, and you nearly have to get on your knees and beg and then lie to get any money out of CIDA for this kind of work. My prime interest would be to establish a modern Canadian- style dairy farm over there and use it as a training centre to bring in young people. Especially, eager young people who are smart and learn quickly. It would start there, and then those people would go back out there just as our young people come out of Guelph and Kemptville and New Liskeard and Alfred. They are equipped to go to work and they are smart, and with the computer programs there are, it is just a breeze. The Chairman: I want to thank you so much, Senator Tunney. It has been really wonderful. It has been very interesting. This committee will be making recommendations, and you certainly have touched on some things that we can deal with in our recommendations. It has been a fascinating meeting, and I have certainly listened to Senator Graham. I do not know how we can fit more in, but we will if we can. Senator Bolduc: When we draft our recommendation, it would be good for the senator to give us his view. The Chairman: I could not agree with you more, Senator Bolduc. The committee is adjourned.