June 7, 1935

CON

Robert Weir (Minister of Agriculture)

Conservative (1867-1942)

Mr. WEIR (Melfort):

That is the purpose of this. I agree with the hon. member as to the difficulty with which the department has been confronted in trying to maintain stockyards as they have been built up, to give the very best service and at the same time not to impose any unnecessary hardship on farmers and cooperative societies who felt that it was more beneficial to them as individuals or groups of individuals to ship direct to the packers, thus obviating certain charges. On various occasions the federal department has been petitioned to establish in the packers' yards the same services as in the stockyards, but the objection to that was felt to be that if we did establish the same services in the packers' yards-that is, compulsory weighing and reporting, and in addition to that competition, where there would be buyers the same as in the^ public stockyards-we should be virtually giving the same service in the packers' yards as in the stockyards, and there would be no reason why the stock should go through the stockyards For that reason this part of the recommendation received very serious consideration. There was no lack of appreciation of what was in the minds of the members of the commission when they made the recommendation. It was felt that it might defeat the end which they were endeavouring to reach. The hogs going into the packers' yards are inspected exactly the same as in the stockyard. Cattle are not inspected in either case. But the purpose of this is so that we will be able,, if necessary, to protect the farmers with certified rates, and also that there will be available to the public through the officials of the marketing branch of the Department of Agriculture prices paid for hogs delivered directly to the packers' plants themselves, so that in this we have met what the hon. member for Melville feels is desirable and at the same time we have avoided doing that which we felt might be more destructive to the stockyards themselves.

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UFA

Edward Joseph Garland

United Farmers of Alberta

Mr. GARLAND (Bow River):

I have followed the discussion so far with some interest, and I am not at all convinced that the minister is meeting the difficulty in the proposal he has made. I notice the report builds up a very strong case showing how the packers manipulate their prices through the handling of direct shinments by truckers. Having

Live Stock Act

Topic:   LIVE STOCK AND PRODUCTS
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CON

Robert Weir (Minister of Agriculture)

Conservative (1867-1942)

Mr. WEIR (Melfort):

There is power at present within the Live Stock Act, section 8, subsection 4, which reads:

The minister may require a live stock exchange operated under this act to adopt new by-laws, rules or regulations, or to amend such by-laws, rules or regulations as may be m force in such manner and to such extent as he deems necessary.

That covers licencing and there is power in that regulation to deal with the majority of those problems. I am and have been decidedly inclined to think that in some of these stockyards there are more commission firms than are necessary to do the work and at the same time give competition in purchasing. There is now power within the act to change the charges of those commission firms. Before this commission sat, the Department of Agriculture had taken steps to insist upon a reduction of the commission men's charges. Some of the commission men complied voluntarily with it; others did not, and the objection raised was that because the whole matter was under investigation by the committee on price spreads and mass buying and later by the royal commission, it should be delayed until this report had been submitted and a decision made as to what action should be taken. That is why the matter was not forced, but the hon. member for Bow River will agree with me that the ideal condition would be for all stock to go through the stockyards, which would make the cost a minimum, and that there should be only sufficient commission firms to give the necessary competition.

One of the difficulties in passing all stock through the stockyards is of a practical nature.^ For example we have a number of processing plants away from localities in which there are public stockyards. We purpose making an investigation and it will not take long to do it, because we have practically all the information- on hand. When the report is in, we intend to decide what reduction we feel will be warranted with this implementing of the recommendations of the commission to enable commission firms to carry on with a profit but not to take undue remuneration for the services that they give to the farmer. But to make all stock go through the present stockyards, or to set up sufficient stockyards to make their service available to those various plants, it -was felt would be perhaps starting something that might not be used if the livestock producers of the dominion take advantage, as we have every reason to hope they will, of the Natural Products Marketing Act, because they as producers themselves will have it in their own power to bargain with the packers and any other purchasers for direct shipments. At the same time, if they wish, they will have all their bargaining

Live Stock Act

power before the live stock leaves the farm, though they might also decide to sell their cattle on the basis of grade on the rail, the same as hogs. To show how the farmers realize the importance of rail grading as being the soundest grading in connection with hogs, an experiment was made a little over a year ago to make it available to farmers at certain Canadian plants, namely Peterborough and Stratford so that they could have their hogs graded voluntarily on the rail if they so wished, and at the same time those who did not wish that might continue to receive the service of our grading in the public stockyards. The result has been that during the last year, although this is purely voluntary, more than 90 per cent of the farmers have asked that their hogs be graded on the rail. That has been so satisfactory that we have had demands to extend it. We have been asked to start the same practice in western Canada, and demands have also been received from eastern Canada. This week we are starting grading on the rail in plants in western Canada. If that continues to be as satisfactory as we hope it will it might be possible that the live stock men themselves, if they were organized as a body, would prefer to ship directly to the packing plants with a price set in advance on the basis of the grade or quality of the product when it was graded on the rails by independent graders. I may say for the assurance of the hon. member for Bow River (Mr. Garland) that we believe that with the small amendments we have introduced, together with the power we have under the Live Stock Act of changing our regulations, we have sufficient power to deal with the whole situation.

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UFA

Edward Joseph Garland

United Farmers of Alberta

Mr. GARLAND (Bow River):

I am glad

to hear that the minister has all the powers necessary under existing legislation. May the committee be assured that the minister proposes to exercise those powers, and. for example, to license commission men? I ask that first.

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CON

Robert Weir (Minister of Agriculture)

Conservative (1867-1942)

Mr. WEIR (Melfort):

They are licensed

through the exchange at the present time. We believe that we have the power to license them directly, and in effect to do away with the live stock exchange. But it is believed that if we could achieve the same purpose without wiping out the live stock exchange it might be desirable, because the exchange performs a service that it would be difficult for the department to perform. But I can assure the hon. member that nothing will be left undone to give effect to their recommendations in the interests of the producer.

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UFA

Edward Joseph Garland

United Farmers of Alberta

Mr. GARLAND (Bow River):

Then I understand that part of the recommendation is not going to be carried out at the present time? The minister is still going to permit the commission men to be licensed by the exchange.

Then what about this question of shipment of live stock direct by truckers? The recommendation in that regard is in my opinion most important. If direct shipment is to continue it is going to be, as the hon. member for Peace River (Mr. Kennedy) said disastrous to the market, to the producer. Packers are not going to be easily regulated, I have no information of any country yet that has been successful in regulating a private monopoly, and the packers are shown by this report to be operating a private monopoly. Unless the minister takes his stand in this matter to legislate religiously in accordance with the report, I am afraid all his efforts are going to be futile. He suggested that I was in agreement with him as to what can best be done. I share his opinion that the producers must themselves undertake cooperative organization, and I think they have opportunity to do that under the Natural Products Marketing Act. I am sorry that they have not succeeded so far in establishing a nation wide scheme in regard to live stock. But even that is not going to settle this problem. As long as the price depends upon an export surplus, or may be affected iby it, it is still going to require governmental action in the event of_ the price level falling below cost. If the minister really wants to know what I think about it, I think we should have our packing plants owned as public utilities, or cooperatively. Until the producer is in a position, both in intelligence and in finance, to take over and operate them cooperatively I think they should be operated as a public utility. I would ask the minister to turn to page 146 of the report and he will find what my opinion is after that stage has been reached.

Topic:   LIVE STOCK AND PRODUCTS
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LIB

James Lorimer Ilsley

Liberal

Mr. ILSLEY:

Does the hon. member mean that the government should operate them directly?

Topic:   LIVE STOCK AND PRODUCTS
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UFA
LIB
UFA

Edward Joseph Garland

United Farmers of Alberta

Mr. GARLAND (Bow River):

My hon. friend knows something about public utilities.

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LIB
UFA

Edward Joseph Garland

United Farmers of Alberta

Mr. GARLAND (Bow River):

At page 146 of the report we find the following:

The pri,ce received for this, exportable surplus, however, under present conditions becomes the basis of the domestic price; one result of which, during the last few years, has been extremely low prices for agricultural products in Canada. These prices, indeed, have often reached a level far below the cost of production.

. This means that the agricultural population, which constitutes a large proportion of the total population of the country and consumes large quantities of manufactured goods, has had little or no buying power. This, in turn, has restricted' the consumption and hence the manufacture of manufactured goods.

If the necessity for increasing the farmer's buying power is admitted-

And I presume the committee is prepared to admit that.

-and if world conditions prevent this being accomplished by international action, the question arises whether domestic prices are to continue to be controlled by the price of the small exportable surplus. The alternative is to maintain a domestic price, if necessary by governmental action, in keeping with the domestic cost of production and allowing the exportable surplus to get what it can.

I am strongly in favour of that implied recommendation of this committee. I submit to the minister that if he really is looking far enough ahead in the matter he will be now organizing his department for the purpose of operating the packing concerns of this country as public utilities. In my opinion it is a crime that we should leave them in the hands of a few exploiting concerns-two in fact, seventy-eight per cent of the business being controlled by them, and they having power as a result of that to swindle flagrantly and brazenly the poor devils who are working to produce the real wealth of the country. It is time some direct action was taken in regard to that.

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CON

Robert Weir (Minister of Agriculture)

Conservative (1867-1942)

Mr. WEIR (Melfort):

In reply to the hon. member's suggestion that this industry is in the hands of a combine, if we take that for granted for the sake of argument-

Topic:   LIVE STOCK AND PRODUCTS
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UFA

Edward Joseph Garland

United Farmers of Alberta

Mr. GARLAND (Bow River):

It is contained in the report, no one has to take it for granted.

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CON

Robert Weir (Minister of Agriculture)

Conservative (1867-1942)

Mr. WBIR (Melfort):

My fear in that connection is that if all live stock were forced through the stock yards in Montreal for example, we know that it could not be held for any considerable length of time in those yards, live stock being in almost every sense a perishable product, and so under those conditions, if there was no competition in buying, as there would not be with a com-

bine, the producers would be more than ever in the hands of the combine. It was because of that fear that we resolved to make it possible for the producers to organize so that they would have the whole volume of the ^product behind them, and in that way they would he rather the masters than the servants in setting the price.

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LIB-PRO
CON

Robert Weir (Minister of Agriculture)

Conservative (1867-1942)

Mr. WEIR (Melfort):

A monopoly of a different kind. Also they would be in this position, that by making a small levy, or by whatever means would be devised, they could take care of the small exportable surplus and prevent it having a disastrous effect, as I think we all agree it has now, on the domestic price. The only difference between the hon. members' opinion in that connection and my own is this: I feel that those people who have built up a very successful business are particularly anxious to give the best service that they can, and if the producers were organized to have control of their own product I am sure that they can find common ground with the people who are now in charge of the processing. They would be able to negotiate with them in a very different way, and would have a very different respect for them if they realized that they had power to put into effect what they wished to put into effect. This is a large question, but we have given serious consideration to the recommendations of the commission, and no time is being wasted.

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UFA

Edward Joseph Garland

United Farmers of Alberta

Mr. GARLAND (Bow River):

For fear the committee may not quite have understood the character of this monopoly it may be necessary to give one or two quotations from the report itself. At page 55, dealing with the meat packing industry, I find the following, referring to the Swift Canadian Company and Canada Packers Limited:

It may be fairly stated, therefore, that these two companies dominate the industry. Their buying and marketing policies affect their smaller competitors and largely determine the operating method's of the industry. A proper appreciation by the managements of these companies of their responsibilities to producers and consumers is manifestly of supreme importance.

On the following page we find:

The manner in which these results-

Referring to profits.

-have been achieved has a direct relation to the monopolistic character of the structure of the industry.

Live Stock Act

That is clear enough. Then again ah the bottom of page 56 I read:

Further reference will be made to the profits of these companies, but we should here consider the view expressed by the president of Canada Packers Limited, of the relations of the industry to producers and consumers. This witness summed up his estimate of the situation as follows:

"The total live stock is sold for the total sum, whatever it is; from that sum is deducted the packer's expense and the packer's profit and the farmer gets the balance."

According to the president of Canada Packers the farmer gets the leavings, if there is any balance left, andi in recent years there has been no balance. At the top of page 57 there is a further paragraph dealing with the opinion of this witness, and the thought of the commisison in that regard is contained in the last two sentences:

We cannot, therefore, escape the conclusion that the continued prosperity of Canada Packers Limited during the depression bears some relation to the enjoyment of relative freedom from competition. That the inadequacy of such competition has operated to the detriment of the primary producer seems evident.

That establishes clearly the monopolistic character of this industry, and since it is a monopoly which affects the well being not only of the consumers but of a most important body of producers it is obvious logical1 to accept the suggestion that it should be either publicly owned or, as I personally prefer, owned by the producers themselves. If the minister could only give the producers some real encouragement and financial assistance in order to enable them to take over and operate these packing plants in the interests of the country it would meet every objection I have, but until he does that he is not even touching the problem. You cannot regulate a private monopoly; it has not been done successfully anywhere. All the anti-trust laws of the United States were successfully evaded, and trust and combine conditions in that country are as bad as if not worse than they were previously. So it will remain under private ownership of monopolies in this country.

Topic:   LIVE STOCK AND PRODUCTS
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CON

John Thomas Sproule

Conservative (1867-1942)

Mr. SPROULE:

When the minister speaks of the grading of hogs on the rail, are those grades marked, whether they are butchers or what grade they are? Is that done also with lambs? Do they brand them so that the consumer can see the grade and whether $2 has been taken off or whether it has not?

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CON

Robert Weir (Minister of Agriculture)

Conservative (1867-1942)

Mr. WEIR (Melfort):

There is no grading of lambs on the rail. There is grading of hogs on the rail, and they do carry the

identification mark of the producer, so there is returned to him the premium to which he is entitled according to the grade, bacon or select. The way that works out is best illustrated by the fact that ninety per cent of the farmers in areas where this grading was started on a voluntary basis asked for that rather than the other method, because they feel they are getting paid for their products on the basis of quality.

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June 7, 1935