Mr. BLACKMORE:

I wonder whether the minister has taken definite action towards getting production of hogs in each month of the year. We read a great deal about the difficulty which confronts us in this matter. In my area that difficulty is probably accentuated; I believe it exists there to a greater degree than in other parts of Canada. I am sure that if some concerted effort could be made by the Department of Agriculture at Ottawa in conjunction with the provincial departments, propaganda could be carried on among farmers to show them the value of producing hogs ready for market in each of the various months, instead of producing all their hogs in two or three seasons of the year and flooding the market. Would the minister mind telling us what his plans are with respect to this matter?

Mr. GARDINER:

The hon. member for Haldimand has put his finger on the most important part of this particular section:

. . . prescribing from time to time the quantity, quality, grade or class that may be exported.

In that provision we are taking the power to do by regulation exactly what many people have been advocating. We are trying to exercise some control over the shipment of bacon of certain types to the British market. There is one feature of the problem which has been very little spoken of and not emphasized at all, and that is the fact that we are building up a market in Great Britain. Denmark had a market there and they were selling much more bacon in Great Britain than the British authorities wished them to sell. The British authorities thought that their own people should supply a greater percentage of that market than they had previously done, and under the arrangements entered into in 1932 there was not only a desire to assist Canada as one of the dominions in selling more bacon in the British market but a very definite desire on the part of the British government to encourage their own people to supply more of their own market, and they brought this about by means of quotas to some other countries, including Denmark. This rather reduced the sales of those countries in Great Britain. We on the other hand have more than double the quota we have been able to supply in Great Britain in recent years. The year before last was our highest; we were up to 190,000,000 out of a possible 2S0,000,000. We have been attempting to

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work up to that quota. Anyone who is trying to work up to a quota will take a lower price for the time being than others who are in. the market and who already have their quota and are supplying that market. They have established themselves over a term of years and are working in a market where they have control of all that they can supply, whereas we are only now working in that direction.

To indicate some of the difficulties in that connection I would point out that in March of this year Holland increased her supplies in the British market by 47 per cent. Poland increased her supply by 38 per cent. Denmark did not increase her supply but remained about the same, and our supplies went down by 13 per cent. There was only one reason why our supplies went down in that period, and that was the fact that we did not have the bacon to send to Great Britain; and there is one explanation, the fact that the people who were raising hogs last year did not have the feed and they went out of hog production. It takes a year to get back into production after you have gone out. Again, the cost of feed was high last year. Wheat was selling at $1.32 a bushel and all other grains proportionately. People are not inclined to carry feed to hogs when they can sell the feed for more than they can get out of the hogs, and naturally they drift out of hog production during such a period, unless you have them persuaded to the point where they are convinced that hog-raising over the long-time period is the important thing to do. If they believe that, then they will keep on producing and supplying the market which they hope to hold. Our people have not been persuaded up to that point, and many of those who were producing hogs two or three years ago were producing them as a substitute for something else which they desired to do. As soon as they had an opportunity of doing what they wanted to do, they got out of hog production. This is something we have to overcome, as suggested by the hon. member for Lethbridge.

We are producing hogs in a country where, over a considerable area, it is from 10 to 30 degrees below zero for five or six months of the year, and any farmer who has hogs born in that period knows the difficulties he has to face. He may start with a litter of ten or fifteen little pigs and inside a week he has five left; indeed, he is lucky if he has five. Where hogs are produced under these conditions only one thing can be expected; the farmer eventually comes to the conclusion that the time to have his hogs coming in is in April [DOT]or May or some time when the weather is good and he can keep his litters and raise

(Mr Gardiner.]

them. To overcome that difficulty there is much to be done in the way of education. As I stated on a previous occasion, there are a few men across Canada who are meeting the difficulty by having heated piggeries in which to have young litters produced in the winter months. These men tell me that under present conditions, when very few farmers are doing this, it pays them to do it because they can have pigs to sell in July when the price is two or three cents higher than at any other time of the year. They feed them up to that month and then sell them to advantage. But the trouble is that if everyone did that, probably the farmers could not stand the additional expense of maintaining heated piggeries for the production of hogs at the time when the price is at a favourable level, because the price would not remain at that level.

There is only one way of overcoming that difficulty and it is the method suggested a few minutes ago. The difficulty can be overcome in part by the formation of cooperatives under Bill 89 which we have put through this session. Instead of levelling up production of hogs we can level up the price. As it is to-day the producer of hogs has his hogs all coming in the spring and he has them ready for market in November. Every packing house knows that, and apart altogether from the question whether the packing houses are fair or unfair, the fact remains that if every farmer wants to sell his hogs in the same week, no matter how fair the packing houses wish to be they cannot take these hogs at the price which the farmer would receive if his hogs were sold throughout the year. That is one of the difficulties that we have to meet in a country in which there are such great variations in climate as we have in Canada, but we are doing everything we can.

We are putting out an advertisement in the newspapers, showing a graph, a copy of which I have here. It gives the price. In the middle of the summer the price runs away up. This graph applies to last year when the complaint was made that the price went up to 10 and 12 cents in July and down to 7 cents in November and December. The farmer said that when he had no hogs to sell the price was up and when he had hogs the price was down. Of course the price is away up to 10 or 12 cents in July when only the occasional hog can be purchased, and it is down when everyone wishes to sell. Production runs in the opposite direction. It starts in January and runs on down until it almost reaches the vanishing point in July, and then it runs up in November and the price takes the opposite curve. We can overcome this

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difficulty by producing the commodity more consistently throughout the year and supplying it to the market accordingly.

Mr. RICKARD:

What is the reason for the fluctuation of price from week to week or month to month from 25 cents to $1?

Mr. GARDINER:

Well, sometimes we try to convince ourselves that the law of supply and demand does not work, but it has an unfortunate habit of operating whether we like it or not. We talk about trying to regulate prices, production and all that sort of thing, and we sometimes say that we should copy other countries, notably Great Britain. I understand that during the course of one week last fall the price of hogs in Great Britain dropped 12 shillings, and I do not know of any country in the world that has more regulation at the present time with regard to hog production and sale than Great Britain. After all, when hogs are there to be purchased in greater volume than they can be consumed, that will have some effect on the price no matter what regulation may be in effect; and when there are not enough hogs to supply the demand that also will have an effect on the price. I do not know how these difficulties can be overcome, other than by trying to keep the supply in some way regulated to the demand, and that is very difficult.

Mr. THOMPSON:

One of the most alarming features in connection with the bacon trade is the poor quality of bacon Canada is putting on the British market. It seems that we consume the best qualities of our bacon at home, where nearly ninety per cent of our production is consumed, and that a poorer quality is shipped overseas. At least it is a fact that our bacon takes only fourth or fifth place in the British market. Consequently it is sold for a good deal less than it should be, and that has a tendency to regulate the price of hogs in this country. I think there should be stricter grading and stricter supervision: of the bacon we export. We can never hope to build up a market in Great Britain until we supply a high grade of bacon. Quantity and quality are the two things that will spell success to the bacon hog raisers of Canada. We must arrange for a continuous supply of high grade bacon; and until there is better supervision of our exports, so that we can place on the British market bacon that will compete with the Danish, Irish and English bacon, we can never hope to get the price for our bacon that we should receive.

Mr. BLAIR:

I should like the opinion of

the minister on the question whether the variation in price in Canada is justified, in view of the fact that the cold storage plants are largely subsidized by the government. We think perhaps the farmers are being imposed upon through such great variations.

Mr. GARDINER:

We have subsidized cooperative cold storages and other plants which provide accommodation to the public, but packing house storages are operated for the benefit of the packing houses, and we do not subsidize them.

In reply to the suggestion of the hon. member for Lanark, I may say that the greater part of the bacon exported is our best bacon. We export 45 per cent of the bacon from inspected plants. A statement I have before me indicates that in 1938 grade A bacon formed 90'5 per cent of our exports to Great Britain, and that is our highest grade. The difficulty is not so much in regard to the quality of the bacon; it is in regard to the sizes. The British market requires sizes that we are not able to furnish in the proportion they would like; that is, sizes from 55 to 60 and 60 to 65. Our supplies are too great in some of the other groups. That is our difficulty, rather than anything in connection with quality.

The other difficulty is the one I mentioned a moment ago. Our bacon has sold within two shillings of the best Danish bacon, but that was at a time when we were not supplying the market we had previously developed in Great Britain. What we are doing now is to try to convince a greater and greater number of people each year that Canadian bacon is just as good as any other.

So it is.

Mr. GARDINER:

Some one says "so it is" and that is true. We convince a group of people that this is so; in other words we create a demand for our bacon. But then we run into a period of a few months when our bacon is not available, and these people go back to some other kind of bacon. They form a taste for that other kind; they like it; they say, "We can get this all the time, and now we know how to handle it," and we have to go through a process of creating a market all over again. When our supplies were in proportion to the market we had created we were able to get to within two shillings of the price of the best Danish bacon. Then when we reached the other extreme a few months later and supplied more bacon than was required for the market we had developed, our price dropped considerably.

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So that our problem is one of producing, as nearly as that can be done, a constant supply of the best type of Canadian bacon for the British market, thereby retaining the customers who can consume what we supply, trying not to create a larger market than we can satisfy at all times but to keep our supply equal to the demand at all times, while gradually building up both our market and our exports year by year. A great deal of educational work is required in Canada as well as in the old country if we are to bring about that result.

Mr. FURNISS:

In a riding adjoining that which I represent we have a cooperative packing plant which it has been my pleasure to visit on several occasions. I was there in January of this year and watched the government grader doing his work. I believe if all our hogs were handled with the same care, many of our troubles would disappear. The grader stood there with a measure in his hand minutely testing the thickness of the fat at three places on the back of every side that came before him. I believe he told me they were allowed a latitude of only one-quarter inch in the thickness of the fat at the various points, which meant that it might be one-eighth inch thicker at one point or one-eighth inch thinner, but it had to be uniform right through. He also told me they were trying to establish, as I understood him, a special grade, and he was marking some particular carcasses in that grade for shipment to the British market. I asked the manager of the plant about the fluctuation in the price of hogs, because a farmer living not far from me had complained that the Department of Agriculture were not releasing the prices of bacon in the British market, when there was a wide spread between the price of hogs here and the price of bacon there. The manager of the plant told me that at that time every pork packer in the country was losing in the neighbourhood of a dollar per hog for every one he processed. He said, "We were bound to bid them up in order to keep up our supply at the present time, to fill in our quota for the British market." If they were losing that at that time it meant that the spread between the price of bacon and the price of hogs was very close. I do not think we could convince any farmer that a meat packer would lose money at any time. He accordingly puts that down for the spread it should always be.

If a meat packer will lose a dollar per hog in one half of the season, in order to keep up the supply, he cannot carry on unless he makes it up in some other part of the season. When hogs are plentiful he has to depress the

price that much in order to recover what he had lost. This was the explanation that was given to me. He said that when the supply was low they were bound to bid up and make the margin close. Then when the supply was heavy they actually had to protect themselves from loss.

Something was said a while ago about cooperative marketing associations. I have marketed stock through the cooperative farmers' organization on the stock yards in Toronto. In my opinion they are just another commission house, and operate in the same way. One can get just as good service and get as good a price from any other commission house on the Toronto market. That was my experience, at any rate.

I do not believe there is any way in which to protect the farmer or to give him justice until we market our meat products through a cooperative packing plant. If there were more of them such as the one in the county of Simcoe, we would be better off. The farmer who sells his hogs-and they are practically all trucked in-has the privilege of taking either live grading, or grading on the rail. No matter which he takes, a record is kept of every hog, and a report is furnished him when he gets his cheque showing how much they brought, graded on the rail, and how much they would have brought live grading. Thus it shows how he has benefited by raising the right class of hog. The grader told me that in the two or three years he has been stationed there the dressing out weight of hogs has been improved by at least two or three per cent through education of the farmers in that way. If he finds that a farmer has a particularly good type of hogs, he writes to him and advises him to keep those hogs for breeding purposes. In that way he has encouraged many farmers to raise a better type of bacon hog.

Mr. WEIR:

Many of the points hon. members opposite have been raising are dealt with in this section. For instance, paragraph (e) contains these words:

(e) Prescribing from time to time the quantity, quality, grade or class that may be exported.

This would seem to cover the question of quality of products going overseas, and particularly the type of bacon. I had intended, however, to refer particularly to paragraph (j), which states:

(j) prescribing the manner in which a receiver of live stock and live stock products shall make returns and prepare for presentation to the seller or shipper the statements of account of purchase of such live stock and live stock products, and for the investigation of such statements and the transactions represented thereby.

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I think this paragraph would cover the rail grading of hogs. I presume rail grading is likely to increase in Canada. My complaint with respect to it has to do with the type of statement a producer gets. No one could understand what it means. I recall having received two or three of those statements, on which would appear the classifications BB or AA, and certain numbers. From the statement he received on a rail graded hog a man could not identify the stock he had delivered. Therefore I think we lose the inducement, or encouragement to a man to select the type of hog which will produce first class bacon. I submit that the statement furnished to the producer by people who rail grade these hogs should be so worded that it will be possible for the producers to know what the actual grading was and wherein their hogs fell below the first class grade.

Mr. SENN:

I fully agree with the hon. member who has just spoken when he says that rail grading is a proper method, and that it is designed sooner or laiter to be the only manner in which hogs are graded on the market. One thing, however, which should have consideration at this time is the differential between the prices of hogs on the hoof and hogs on the rail. The farmer has the opportunity and the privilege of electing whether he shall be paid on the rail grade basis or on the hoof. Who sets that differential from time to time between dive hogs and dressed hogs? After, all the incentive to a farmer to rail grade depends very largely on whether that differential is in proper proportion. If it is not in proper proportion and he gets a little more than he should get for hogs graded on the rail, or otherwise, it will affect his position in time to come. The department might very well exercise some supervision over that differential.

Speaking a little while ago about the quality of our bacon overseas the minister said that much of it was not in proper sizes. I remember distinctly a question on the order paper which indicated that grade A sizables of Canadian bacon going to the old country constituted forty-eight per cent of the total which went over last year. If we are going to have properly sized bacon going over there, some inducement must be offered to the farmer to grade his hogs to proper size. As the minister said last night, there are times in Montreal, Winnipeg and other centres when farmers get more per pound for shop hogs than they get for hogs of proper size. When that happens there is very little inducement to a farmer to raise the right type of hog. It is true there are times when shop hogs

are more valuable >to the local butcher than hogs in larger sizes. Is there any departmental supervision over the differential between prices of hogs graded on the hoof and those graded on the rail?

Mr. GARDINER:

The only supervision the department exercises is with regard to premium. The differential is pretty well determined by the purchaser of the hog. He tells the individual that he can have either rail grading at a price or hogs graded on the hoof at a price. The farmer makes his choice as to which price he thinks is the better one, and I think from that point of view the differential is settled by the purchaser from the packing house.

Mr. SENN:

But should it be? Perhaps I am going far afield in my discussion, but this clause has to do with the grading and marketing of live stock products. In the supplementary estimates there is an item of $200,000 to assist in the marketing of beef. Would the minister care to make a statement as to what is contemplated in connection with that vote? I believe it would come under the new legislation.

Mr. GARDINER:

I would rather discuss that when the estimates are before the committee, because it really has no relationship to the matter we are now discussing.

Mr. BLACKMORE:

I am interested in the question of increasing production in Canada so that we may have regular supplies. Would it be possible to set a price below which the producer would be reasonably sure he would not have to sell? In arriving at that price, could we not consider the ordinary price being offered in Britain and strike some sort of computing average below which Canadian bacon could not fall? A great many hogs were produced in my constituency during a certain period, but in 1932-33 prices fell so disastrously that a large percentage of the hog producers have never since dared go back into production. They feel that with such a variation in price they would not dare to attempt production, for fear that when their product was ready, no matter what time of the year it might be, the price would be down. The cause of all the trouble in my constituency is this dangerous variation in price. I was wondering if it would not be possible to organize things in such a way so that we could say to the producer, " No matter when you produce your hogs, whether it be in January or February, you will be assured of getting a certain price; the price will not be below a certain figure." It might be possible to build up a fund to provide for any difference that

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might arise. The question is a difficult one, but it will have to be answered before we can get on anything like a firm or dependable basis for hog production.

Mr. GARDINER:

Again I can only say that the country which has attempted to do more along this line than any other is Great Britain. There is a reason why it should be easier to carry it out there than in other countries, and that is the small percentage of the population engaged in the production of food products. I think it would be correct to say that at the outside not more than ten per cent of the people are producing hogs. But all the people of Great Britain are eating bacon and pork products. If there was any possibility of establishing what might be called a guaranteed price, it should be in that country. Hon. members who had the opportunity of listening to the present Minister of Agriculture in Great Britain when he was journeying across this country from Australia before he became minister will recall that at all meetings which he addressed there was considerable discussion of this very matter of setting quotas and prices and everything of that kind in order to regulate the production of food products, not only in Great Britain but throughout the empire. I am sorry I have not on my desk at the moment the report of his last speech in the old country, but he stated most definitely that a guaranteed price was an impossibility. He cited one or two cases in which it had been tried, but it was found impossible to maintain the price. He said that the best that possibly could be done was to ensure some figure below which the price of the product would not fall.

Mr. BLACKMORE:

That was what I was suggesting.

Mr. GARDINER:

That is not what is being discussed widely in this country at the present time. There are very few who say that what they want is a bottom figure below which the price should not fall. What they are asking for is the cost of production, no matter what that is. In countries where they have been trying to establish something of this kind they have finally had to come to the conclusion that the best they could do was to ensure a bottom. Something has been done in this direction here by legislation this session. A method has been indicated by which it might be done, but I do not know that in a country such as ours the government could take full responsibility. I think a large part of the responsibility will have to be assumed by the producers themselves by the formation of

fMr. Blackmore.]

cooperatives or some other method. Of course, the government could come into the picture through guaranteeing the bottom.

The extent of our country presents another difficulty in attempting to regulate prices, and the valuation of conditions which prevail across the country must be considered. For example, hogs produced in western Canada must be marketed largely in Vancouver, Toronto, Montreal or Winnipeg. Those are the centres where centralization of population is to be found. But when you are producing hogs immediately adjacent to one of these centres of population, you are producing under an entirely different set of circumstances. It would be almost impossible to attempt to establish a guaranteed price to apply to the production of hogs in all parts of this country. However, there are ways of trying to approach the desired end, and I think these are pretty well established in the legislation we have brought down.

Mr. BLACKMORE:

To what extent could the packing houses be used to carry over the production of, say, November to some later month? What is the cost of storing hogs for a given period of time?