July 13, 1955

LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. Gardiner:

At whose expense?

Topic:   AGRICULTURE
Subtopic:   SUGGESTED POLICY FOR STABILIZATION OF INDUSTRY
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CCF

Alexander Malcolm Nicholson

Co-operative Commonwealth Federation (C.C.F.)

Mr. Nicholson:

It is at my expense, unfortunately.

Topic:   AGRICULTURE
Subtopic:   SUGGESTED POLICY FOR STABILIZATION OF INDUSTRY
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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. Gardiner:

No. What I mean is this; at whose expense are you going to produce this food to ship everywhere.

Topic:   AGRICULTURE
Subtopic:   SUGGESTED POLICY FOR STABILIZATION OF INDUSTRY
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CCF

Alexander Malcolm Nicholson

Co-operative Commonwealth Federation (C.C.F.)

Mr. Nicholson:

I am going to say something about that matter in a minute or two if the minister will give me a chance to do so.

The result is a cost-price squeeze that has made serious inroads on the standard of living of Canadian farmers.

As I said, I do not agree with some of the findings of the Canadian Federation of Agriculture, but what I have read is fundamental. The minister's statistics and the statistics supplied by the bureau of statistics support the view that the Canadian agricultural economy is in a very critical condition. In bringing down his Agricultural Prices Support Act in 1944 the minister stated:

In prescribing (support or guaranteed) prices . . . the board . . . shall endeavour to secure a fair relationship between the returns from agriculture and those from other occupations. With this goal (parity of income for the farmer) we are in agreement since it expresses exactly the objective of organized agriculture in Canada today.

Apparently in 1944 the minister did have some understanding of a prices support act which would give the farmers prices so there would be a proper relationship between what the farmer receives and what others in the economy receive. But since that time the farmers' position has grown worse each year. As other members of this group have indicated, with about 20 per cent of the people of Canada classified as farmers they are now getting well under 10 per cent of the total national income. It does not matter whether you live in Prince Edward Island, in British Columbia or in Saskatchewan; if you belong to a section of the economy that receives 10 per cent when you should be getting 20 per cent, you cannot possibly have the standard of living you should have.

I am not finding fault with others in our economy who are able to bargain collectively. Recently in the United States the automobile workers have been able to win a point which will guarantee an annual wage. Next year the price of automobiles will go up. The dealers will have a greater commission. All the people along the line will carry the cost. In the province of Ontario a few weeks ago the medical doctors decided that costs have gone up and that they should pass on to the people who are sick the increased costs in connection with looking after the sick. While there are protests here and there the medical doctors, through their

organization, are able to pass on to the people in the community the increased costs which they decide are reasonable.

The Minister of Agriculture said that he could not find any reference to the fact that the interprovincial farm union council asked for parity prices. I might mention that in the brief they presented to the standing committee on agriculture on May 23 they asked for a national agricultural policy. They asked for:

Establishment of a new national agricultural policy that will guarantee farmers parity prices for grain and all other farm products sold on domestic markets, and equitable floor prices for all farm products sold on export markets.

But in their previous submission on January 19 they said that Canada needs a new national agricultural policy. They said:

Recorded statistics indicate that agriculture in Canada has been a depressed industry more often than not. Over most of the years a large percentage of the farming population has never been able to do much better than eke out a bare, poverty-stricken existence.

Unfortunately that is an accurate description of agriculture.

I listened to the hon. member for Acadia with interest this morning. I was surprised that the Secretary of State for External Affairs, while participating in a by-election in Alberta, took time to discuss some of our farm problems. As reported in the Edmonton Journal of June 17 the Secretary of State for External Affairs said this:

I've heard Social Crediters say we should reduce our stocks of wheat by accepting foreign currencies or even by giving them away.

This has an appeal when we see our wheat piling up whilst others starve, but in Ottawa we have an obligation to keep trade on solid ground. If we started bartering or giving away, we would disturb international markets and in the long run we would injure not only ourselves but also those we seek to help.

We should try to keep trade on a multilateral, economic basis and disregard emotional superficial solutions to our problems.

I was astonished to hear that trying to produce food for hungry people is a superficial or an emotional solution to a problem.

Mention was made of "The Story of FAO" by Gove Hambidge. As I read this book recently I was interested in some flattering references to the Secretary of State for External Affairs. As all hon. members know, he was chairman of the interim commission. Under the leadership of the distinguished gentleman this is what FAO set out to do, and these are the exact words:

Food production must be greatly expanded.

The necessary technical knowledge is available.

To produce more food is useless unless markets are created to absorb it by a widespread increase in consumer purchasing power.

Each nation is responsible for seeing that its own people have the food they need, but no nation can fully achieve this objective without the cooperation of others.

A permanent international organization with a wide range of technical functions and duties, concerned with food and agriculture, must be established as quickly as possible.

Then for two years the Secretary of State for External Affairs acted as chairman. At the Quebec conference, in winding up the business, he outlined the objectives which were really worth while in connection with the formation of this organization. But Canada really has played a rather insignificant role in connection with carrying out these fine ideals which we accepted some 10 years ago.

When we get around to the estimates of the Department of External Affairs we shall find that we have $323,000 as Canada's contribution to the work of FAO for this year. That works out at about 2 cents or something over 2 cents per person this year. That would not seem to me to be a great strain on our resources.

As soon as this motion is disposed of we shall be coming back to the estimates of the Department of National Defence. In connection with those estimates we have an interesting section dealing with mutual aid. As part of our international contribution toward national defence mutual aid we have $5-9 million for ammunition and bombs; $4-9 million for aircraft engines; $5-3 million for armament equipment; then for transfers to NATO countries we have some $9 million. Then there is another section for equipment. Under this section for mutual aid there is a total of $175 million.

I submit, Mr. Speaker, that $175 million for the Minister of National Defence for mutual aid compared with some $300,000 for the Secretary of State for External Affairs for FAO to carry out projects that he considered 10 years ago were important do not seem a fair distribution of the resources of Canada. I do not know how it is that the Minister of National Defence has so much drag with the other members of the cabinet so he can get $170 million for his mutual aid program, whereas to the job of helping to feed 1,500 million people in the world only about 2 cents each year for every Canadian citizen is devoted.

The Minister of Agriculture referred some time ago to the question of how we could hope to increase Canadian production and consumption of food and also help to feed the hungry of the world. As found at page 4209 of Hansard of May 27, the minister said:

Members of the house throughout this session have been suggesting that the Department of Agriculture should increase production to take care of

Agriculture

an underfed world and at the same time maintain producers' returns at a high level. Attention must be and is being given to both suggestions, but I am sure it will be agreed that what is done in one direction will influence what can be done in the other.

The minister is saying that we cannot produce maximum quantities, give our farmers a fair share of the national income, and also feed the hungry people of the world. Twenty years ago anyone who suggested that we could do both things might have been thought to be irresponsible, but I must remind the house again that during the war years we found no problem in Canada in increasing our own consumption and production and giving our products away at a tremendous rate. When the war was over we found ourselves with a much more valuable investment in plant and equipment than we had when the war started. The Canadian people had a higher standard of living at the end of the war than they had at the beginning.

I submit again that if the tragedy of a third world war should occur the Canadian government, no matter which party was in office, would find, as was the case previously, that whatever is physically possible can be made financially possible.

I appeal to members in all sections of the house to support the amendment moved by the hon. member for Humboldt-Melfort. The Minister of Agriculture suggested it was a want of confidence motion. There have been similar motions. I had an amendment some years ago in connection with the milk subsidy which was carried by a majority. The main motion was then put and we went into supply. We did not have a general election. All that has to be done is for the leader of the house to tell members on the government side to use their own best judgment and decide whether they do not think it would be in the best interests of Canada to have a system of parity prices so that those who are producing food in all parts of Canada may have in return for the food they produce a fair share of the total wealth produced by all in Canada.

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CCF

Frederick Samuel Zaplitny

Co-operative Commonwealth Federation (C.C.F.)

Mr. F. S. Zapliiny (Dauphin):

Mr. Speaker, the amendment before the house is very important. As has been indicated by the mover, we do not regard the question of a parity price system as affecting agriculture only, although it does have immediate reference to that sector of our economy. As a matter of fact we regard the question of a fair share of the national income for agriculture as being one of importance to the whole Canadian economy.

Some time ago in a discussion on unemployment the leader of this group pointed out

Agriculture

that it was no coincidence that over the same period and almost in the same percentages as net returns to Canadian agriculture went down, unemployment figures in Canada climbed. The two are closely related, because it is well known that farmers as a group are the best customers Canada can have. They are not only customers in the ordinary sense of being domestic consumers of goods and services; they are also good customers because they require for purposes of production a great many things that people ordinarily do not buy. I refer to things such as farm implements, fuel, hardware, tools and so forth, used by farmers in large quantities for purposes of production and the purchase of which helps keep the economy going and maintain full employment.

The Minister of Agriculture made a rather resounding speech today on the general question of agriculture. We have learned to be a little cautious, as I think most of the farmers of Canada have, about accepting at face value the things the minister has to say about agriculture. It is well known that he can make a very good case out of very flimsy material. In spite of the many generalities he gave us today, he made no attempt whatever to face the problem and explain why net farm income in Canada has dropped so seriously since 1951, and that is something that should have been done.

According to the latest figures available net farm income in 1954 dropped from the previous year by about 33 per cent. To put the drop in dollars, whereas in 1953 net farm income was $1,699 million, by 1954 it had dropped to $1,125 million. Taking the whole period from 1951 to 1954 the drop was even more pronounced. In 1951 it was $2,154 million whereas by 1954, as I have said, it had dropped to $1,125 million. This is a drop of almost 50 per cent over that period of time.

When the net farm income of agriculture in Canada drops in three years to the extent of about 50 per cent, then certainly neither the Minister of Agriculture nor any member of the government can disregard the situation or explain it away in general terms by telling us that what the government is doing today is what they set out to do during the war, or anything of that kind. In addition, what is apparently not being taken into consideration by the Minister of Agriculture is the fact that at the same time the drastic drop of almost 50 per cent in net income occurred, which means a drop in the net purchasing power of the Canadian farmer, the cost of production actually rose instead of declining.

Not only that, but when we speak of parity we are asking, as our amendment indicates,

for what we think is simple justice, and in my opinion we are not being at all unreasonable. We are asking that as the result of an over-all price policy agriculture should receive its fair share of the national income. Obviously if the net income of agriculture has dropped by almost 50 per cent in three years, that in itself indicates that agriculture is not receiving its fair share of the national income, even if other things were equal. But other things are far from equal.

I have already pointed out that the cost of production has actually risen. In addition to that, we find that some of the industries in Canada, in fact the manufacturing industries of Canada as a group, according to the latest figures which I have here, dated July 11, have been experiencing a rapid increase in income. Dividend payments by Canadian companies in July reached a total of $54,572,373, as compared with July, 1954, when they were $47,109,721, a very substantial increase for the month of July. The cumulative total of dividend payments for the first seven months has now reached $347,507,388, and there are indications that by the end of this year it will reach record levels.

Those are the dividend payments. To them would have to be added the undivided profits, plus the amount placed in reserve, plus depreciation and depletion and all these other accumulations of wealth that go to make the total income of industry. During the same period when the manufacturing industries of Canada were increasing their dividend payments by as much as $7 million over last year, we find that agricultural income dropped by approximately 33 per cent.

This causes us some concern, and we look at this thing in a very serious manner. We are not out to ask for anything more than we think is due to agriculture in Canada, but we do intend to plead the case of Canada's best customer and biggest producer in relation to what has happened in our economy recently. Whereas the basic industry of Canada, which is still agriculture, has suffered great setbacks in the last three or four years we find that other industries are having a field day.

There is also some relationship between those two factors, Mr. Speaker. After all it could be that the one's gain is the other's loss. It may not be on all fours, but it certainly would indicate that if someone is losing his fair share of the national income while someone else is gaining it, then the person who is gaining it is doing so at the expense of the one who is losing it. That is the basic reason for this motion. We are asking the government to set up a price policy, which

we call a parity price system, in order to bring to agriculture its fair share of the national income.

In his reply today the Minister of Agriculture attempted to make a case, first of all, by proving that the government is now following a sort of parity price policy under the Agricultural Prices Support Act. Then he shifted his ground a little toward the end and stated quite categorically the government is not in favour of a parity price policy. He gave certain reasons for it, but I think it is indicative that for perhaps the last three years, at every farm organization convention and practically every local meeting at which I have been present, the question of parity prices has always come up.

The minister seems to find it difficult to locate a reference to parity prices in the resolution or submissions of the interprovincial farm union. I would suggest to him that if he were to read the resolutions passed at the most recent conventions in the three prairie provinces he would find abundant references to parity prices in very specific terms. There is no question but what both the Canadian Federation of Agriculture and the interprovincial farm union are committed to the principle of a parity price system, though they may differ in some of the details as to how it should be applied.

There is no question, either, but that so far as the members of this group are concerned we are committed to the principle of parity prices for agriculture. We have no hesitation in saying that the government itself has a moral pledge, or shall we say a moral responsibility, for bringing about the stabilization of agricultural prices. I shall place on the record the words of the late prime minister himself, used in a broadcast in 1947 when speaking to agriculture specifically. He said:

If to help win the war, the farmers are asked to accept a ceiling on prices, we believe they are entitled to a floor under prices to insure them against an agricultural depression after the war. As an essential part of its post-war policy the government intends to ask parliament at the next session to place a floor under the prices of the main farm commodities.

The minister will say that pledge was carried out by passing the legislation referred to as the Agricultural Prices Support Act. Two of my colleagues have already referred to section 9, subsection 2 of the act which sets out as the objective of the board that the board shall endeavour to ensure adequate and stable returns for agriculture by promoting orderly adjustment from war to peace conditions, and shall endeavour to secure a fair relationship between the returns from agriculture and those from other occupations.

Agriculture

The minister referred to that section also, and said it sets out in clear, specific terms just what is the policy of the government. A careful reading of that, if it means anything at all, would indicate it could mean only one thing, a parity of income for agriculture as compared with other occupational groups in Canada. Unless the government is today prepared to argue that they have achieved that parity and are maintaining it, then of course even on their own admission they are not living up to the policy which was set out in the Agricultural Prices Support Act and in the radio speech delivered by the late prime minister.

The figures I have already quoted I believe are evidence which cannot be contradicted that the government is not maintaining that pledge and is not carrying out its stated policy, if that is what it means by talking of parity of income for agriculture; because, as I have pointed out, agricultural income has dropped almost 50 per cent in the last three and a half years. Since the cost of production has actually gone up, the relationship is simply not there. As the hon. member for Mackenzie (Mr. Nicholson) and others have pointed out, percentagewise the agricultural population of Canada represents about 20 per cent of the people, but their income is somewhere between 9 and 10 per cent.

In view of this the government certainly cannot argue that they have achieved this fair relationship which they express in such euphemistic terms in the Agricultural Prices Support Act. That being so, I think it is necessary for this parliament to address itself to that question and try to evolve a policy which will bring a fair relationship between agricultural income and other occupational groups.

In my opinion there are two main ways in which that can be accomplished. Let me say at the outset that if either of the two ways I am going to mention is accepted it will mean a challenge to the present economic system, to some extent. It will require some interference with what is normally called the free enterprise system. Perhaps for that reason we will find that members on the government side, members of the official opposition, and perhaps even our Social Credit friends to the left will not find themselves able to go along with these two methods.

One of the methods by which parity as between agriculture and the rest of Canada can be achieved in what we normally describe as a high-priced economy, which I think would be comparable to the situation today, would be through a system of subsidies. In other words parliament would have to decide

Agriculture

that a certain price was required in order to bring to the farmer a fair price for his produce, in relation to all other prices in the nation, and be prepared to pay the subsidy out of the national treasury to the extent that that price at any time fell below the open market price at which a commodity could be sold.

Let me hasten to say this, because sometimes when one mentions subsidies and the national treasury in the same sentence people get visions of someone digging in for great handfuls of money to hand out in the form of subsidies. Let me say that to commit parliament to a policy of floor prices and a willingness to pay a subsidy when necessary does not necessarily mean any cost to the public treasury. It does mean that we are prepared to say to the world that in our own nation there will not be any fire sale of agricultural products, and that we consider agricultural production so vital to our economy and consider agriculture so important a section of the Canadian economy that as a nation we are prepared to stand behind a certain policy so we will not sacrifice that section of our economy on the altar of competition on the world market, or however it may be described.

To some extent the Minister of Agriculture argued the same thesis this afternoon, when he tried to impress us with the fact that even though under the Agricultural Prices Support Act there were certain times when none of that revolving fund was used in the form of support prices, yet the very fact that it was there and that the government was prepared to use it, and had authority to use it, had an influence on the market to the extent of keeping the price at or above the floor.

If what the minister argues is true-and I have no reason to doubt his word, because administering the act he is in a position to know-then certainly that can be extended. That same argument can be extended in relation to the whole agricultural policy in Canada.

I am quite prepared to admit that there may be situations and conditions and times where subsidies on some commodities required over a period of time would cost the public treasury a certain amount of money. If that happens, what are the objections? Those who oppose the idea of subsidies-and there are members in the house who quite sincerely, they say, hold that view and do not believe in subsidies on agricultural products-will have to remember that if we are going to follow that through we

[Mr. ZapUtny.l

will have to go back over a long period of Canadian history and reverse the trend that has been growing up.

So far as manufactured products are concerned, Canada has been committed to a system of subsidies for 60 years, or perhaps closer to 70 years. From the time the late Sir John A. Macdonald came out with what was known as the national policy, under which he persuaded the people of Canada that it was desirable to set up a tariff system to keep competitive goods off the Canadian market and, in that way, promote the development of a Canadian manufacturing industry, Canada has been committed to a huge and perhaps unending system of subsidies.

There is no greater subsidy, nor has there been any greater in the history of Canada, than is found in our tariff structure. I am not saying this in criticism of the position taken by members from manufacturing areas when they argue for protection. However, I do make these observations so they will realize what has been the effect of that kind of policy. If they will stop to realize what the consumers of Canada and particularly, as I have pointed out, the farmers, who buy perhaps a great deal more in proportion than do other people, are paying every year, every week and every day on manufactured articles by way of direct subsidies to Canadian manufacturers because of the fact that the protection is there, they will realize at once that this runs into hundreds of millions of dollars each year which comes out of the pockets of the consumers and goes into the hands of Canadian manufacturers so they may enjoy higher prices.

That is a subsidy; it cannot be called anything else. You may call it protection; you may call it customs duties; you may call it tariffs or any other name you wish, but it is nothing more or less than a direct subsidy taken from the pocket of the consumer. The only difference is that it does not channel its way through the public treasury; it goes direct from the pocket of the consumer to the income of the manufacturer. Then I need only mention the fact that we have been committed to a system of subsidies on the production of coal, gold and iron and steel, as well as subsidies on transportation on our railways. These have been going on for years.

The people in western Canada, particularly the farmers, are aware of these facts and are willing to play their part in the national economy. They say that perhaps some of these things are necessary. They are willing to go along with it in the interests of national

unity and the promotion of Canada as a nation. But when the shoe is put on the other foot; when a modest attempt is made to get some sort of guarantee from parliament in connection with agricultural products which, after all, are still the most important production in Canada, and when an effort is made to have some form of insurance through a system of subsidies, if necessary, immediately we are met with the argument that subsidies in themselves are evil, that in principle they are not good.

Without discussing the question of whether subsidies in themselves are good or bad, let us at least be fair in our discussion. If we are prepared to subsidize manufacturing industries in eastern Canada to the tune of hundreds of millions of dollars each year, so those moneys are taken directly from the pockets of the consumers and placed in the coffers of the manufacturers, then certainly as a parliament we should be prepared to pass legislation which would serve as insurance to the producer of farm commodities, so he will not be faced with a fire sale each time he has a surplus. That is one method.

The other method that could be employed would be in what we might describe as a low-priced economy. So far I have been talking about what is normally described as a high-priced economy. In a low-priced economy we could achieve the same objective through a system of price controls. As a matter of fact that was what the government indicated was its policy during the war years and the years immediately thereafter.

I can remember so well, as I am sure other hon. members do, that when the British wheat agreement was entered into in 1946, the Minister of Trade and Commerce, the Minister of Agriculture and the then prime minister made quite a case in the house for that agreement on the basis that, in the long run, it would be better for the agricultural industry in Canada to enjoy a stabilized market, even though it would not have the peaks of high prices, in order to avoid the deep valleys of low prices.

In other words their whole story at that time, their whole objective, was stabilization. They said, "We know the Canadian farmer will not be receiving as much for his grain under the British wheat agreement as he would on the open market at this particular time, but we also know that with such a system of commodity agreements, such a system of guaranteed prices, the farmer will have security which will enable him to plan his production and carry it on with confidence from year to year."

Topic:   AGRICULTURE
Subtopic:   SUGGESTED POLICY FOR STABILIZATION OF INDUSTRY
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PC

Owen C. Trainor

Progressive Conservative

Mr. Trainor:

Was that achieved?

Agriculture

Topic:   AGRICULTURE
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CCF

Frederick Samuel Zaplitny

Co-operative Commonwealth Federation (C.C.F.)

Mr. Zaplitny:

The hon. member for Winnipeg South asks whether that aim was achieved. I would say that it was half achieved, because at that time we had a system of price control over commodities and along with that a policy of stabilization of income for agriculture. But the moment the government changed one-half of its policy; the moment-I think it was on April 15, 1946-they made the first fatal move and agreed to an increase of $5 per ton in steel, which increase was reflected immediately in an upward trend of prices. Then a few weeks later there was an increase in the price of farm machinery, so the moment they lifted the lid off the price control program they destroyed half the policy and stabilization no longer existed.

Topic:   AGRICULTURE
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PC

Owen C. Trainor

Progressive Conservative

Mr. Trainor:

What happened to the price

of wheat?

Topic:   AGRICULTURE
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CCF

Frederick Samuel Zaplitny

Co-operative Commonwealth Federation (C.C.F.)

Mr. Zaplitny:

The price of wheat is under the control of this parliament. This parliament passed the wheat board act under which is set the guaranteed price. So long as that guaranteed price bears some relationship to production costs the farmer will feel that he has stabilization, but by removing price control the government allowed the other half of their policy to go wild and thus destroyed the whole idea of stabilization in this country.

It is a matter of record and history that it ended up by putting the farmer back into a price squeeze, where the price of his product has been going down in the last three years while the cost of production has been rising. I am not arguing that we must use one or other method to the exclusion of the other because it is possible to use a combination of both methods, that is a combination of subsidies and controls such as the government used during the war years.

I believe the first legislation setting up the wartime prices and trade board was passed in 1941 when prices were frozen as at a certain date. We all know, and the Prime Minister was the first to admit, that all prices were not at the proper level at that particular date, but a start had to be made somewhere and through a system of subsidies and adjustments it was possible to bring prices into a fair relationship. We had the milk subsidy, the subsidy paid to millers for the production of bread and subsidies on other items which brought about a fairer relationship.

By 1945, when the war ended, we had a pretty smoothly running and efficient system of prices. The government of the day sold the idea of stabilization to Canadian agriculture on the basis of the British wheat agreement and other commodity agreements

Agriculture

with other countries. But the government then turned around and wiped out the base on which that whole stabilization program was anchored; they wiped out the price control legislation and allowed prices to get out of hand.

That briefly is what I mean when I say we should pool these two methods in order to attain this objective of a fairer share of the national income for agriculture. Whether we adopt one method or the other, or a combination of both, it means a challenge to the free enterprise system. The moment we do that we run up against opposition in this house.

A great deal has been said about the Canadian wheat board, and it would seem as though there was unanimous support for this idea. As a matter of fact that is not so. It is true that the members of this group have always supported it and support it now; it is true that members from western Canada support the idea, but we find that there are both Liberal and Conservative members who are opposed to the wheat board at this time. I think the hon. member for Winnipeg South will not object if I put him in that category.

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LIB

Henry Philip Mang

Liberal

Mr. Mang:

Does the hon. member include western Liberals?

Topic:   AGRICULTURE
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CCF

Frederick Samuel Zaplitny

Co-operative Commonwealth Federation (C.C.F.)

Mr. Zaplitny:

Very definitely so.

Topic:   AGRICULTURE
Subtopic:   SUGGESTED POLICY FOR STABILIZATION OF INDUSTRY
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LIB

Henry Philip Mang

Liberal

Mr. Mang:

Western Saskatchewan Liberals?

Topic:   AGRICULTURE
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CCF

Frederick Samuel Zaplitny

Co-operative Commonwealth Federation (C.C.F.)

Mr. Zaplitny:

Saskatchewan is not the whole of the west; there is such a place as Manitoba.

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PC

Owen C. Trainor

Progressive Conservative

Mr. Trainor:

Would the hon. member maintain that the Canadian wheat board has anything to do with the price of wheat on the markets of the world?

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CCF

Frederick Samuel Zaplitny

Co-operative Commonwealth Federation (C.C.F.)

Mr. Zaplitny:

The wheat board may not be able to go out and set the price of wheat on the markets of the world by any authority vested in it by this house, but it certainly has a tremendous influence on the price of wheat on the markets of the world by the very fact that it is the sole marketing agency for one of the greatest wheat producers in the world. My hon. friend knows that if he were the marketing agent for a manufacturer who held as large a share of the world market for his product as does Canadian wheat normally, he would be in a very strong position to set the price of his product.

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PC

Owen C. Trainor

Progressive Conservative

Mr. Trainor:

Not as long as there is other wheat for sale.

Topic:   AGRICULTURE
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CCF

Frederick Samuel Zaplitny

Co-operative Commonwealth Federation (C.C.F.)

Mr. Zaplitny:

It is a matter of relativity. Answering the question asked by the hon. member for Qu'Appelle, who wanted to know if there were any western Liberals who would

oppose the wheat board, may I say that there definitely are and I can give him the names of a Conservative and a Liberal member in the provincial house in Manitoba. As reported in the Winnipeg Free Press of March 5, discussions were taking place with relation to marketing and Mr. McDowell-who entered the house as a Progressive Conservative but whose present status is doubtful, because there has been some indication that he refuses to sit in their caucus and perhaps now would consider himself an independent, though he is still referred to as a Progressive Conservative-made it quite plain where he stood. He demanded what he called a showdown on the question of the marketing of wheat through the wheat board, and this report continues:

A successful farmer and grain trader-

Incidentally he is more successful as a grain trader.

*-Mr. McDowell charged that abandonment of compulsory marketing through the Canadian wheat board would result in higher prices and a better deal for farmers.

His demands for abandonment of compulsory marketing and return of the open market for grains received "wholehearted agreement" from L. R. Fennell (L-St. Boniface).

That indicates that even at this time when there is discussion as to the status of the Canadian wheat board, on which it might be expected there would be unanimity, there are members of both the major parties represented in this house who are quite prepared to scuttle the wheat board and go back to the Winnipeg grain exchange as a preferable method of doing business. I am quite sure the hon. member for Winnipeg South would be quite happy to see that done.

Topic:   AGRICULTURE
Subtopic:   SUGGESTED POLICY FOR STABILIZATION OF INDUSTRY
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PC

Owen C. Trainor

Progressive Conservative

Mr. Trainor:

We might sell some wheat.

Topic:   AGRICULTURE
Subtopic:   SUGGESTED POLICY FOR STABILIZATION OF INDUSTRY
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CCF

Frederick Samuel Zaplitny

Co-operative Commonwealth Federation (C.C.F.)

Mr. Zaplitny:

The hon. member thinks we might sell some wheat. I would refer him to the recent history of the efforts of one John McFarland. Then he would find out how much would be sold and at what price under this free system of his. I have raised this question, not in order to discuss the merits of the Canadian wheat board but to point out that the whole idea of a stabilized system in our approach to farm commodities is in danger at this time. One of the reasons it is in danger is the fact that the government has abandoned one half of its agricultural stabilization policy, and by doing that is going to damage and perhaps destroy the other half.

It is very important at this time that this parliament adopt an agricultural policy and declare itself prepared, through a parity price system, to stand behind farm commodities and say to the world that there will be no fire sale; that we are not going to

enter into a cutthroat competition method of disposing of our product or allow the Canadian farmer to be the sacrificial goat of the Canadian economy, but we are prepared to stand behind him as the backbone and basis of the whole Canadian economy.

Topic:   AGRICULTURE
Subtopic:   SUGGESTED POLICY FOR STABILIZATION OF INDUSTRY
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SC

John Horne Blackmore

Social Credit

Mr. J. H. Blackmore (Lethbridge):

Mr. Speaker, just a few words in connection with this matter, I think will be in order coming from another member of the Social Credit group. We listened to the minister this afternoon give a fine and interesting talk, such as he always gives.

The minister's major objection to parity prices appeared to be the fear that we should accumulate surpluses. Now, that attitude puts us in a rather bad light. I think everybody recognizes that, because there are, as has been pointed out, demands for far more food in the world than is being supplied. If Canada, one of the major food producing areas in the world, limits production in the face of the growing need through the world, then obviously she is not discharging her responsibilities, and there must be something radically wrong with the way we are managing our affairs.

I suggested on June 10 that the solution to this surplus problem would be storage on the farms. I outlined the method which, I think, would be fairly practicable, by which we could put the grain on the farms and pay the farmers for it, so they would be just as well off as though the grain were in an elevator or as if it were sold abroad. Yet they would have the responsibility for carrying the grain. That would obviate the necessity of using caves or battleship holds to store grain, or having great concentrations of grain or other foods where serious mishaps might befall them.

Briefly I suggested that, in respect of any given farmer, the government should say, "You have for instance 5,000 bushels. We shall lend you the money out of the Bank of Canada at a very low rate of interest, probably 1J or 2 per cent", which is perfectly possible from the Bank of Canada. "With this money you may build on your farm approved farm storage which will stand up against all sorts of conditions which might befall grain stored on farms in any part of Canada. When you have that storage built and put the wheat in it, we will pay you for the wheat at the going price just as though you delivered the wheat to the elevator. Then you begin to take care of the wheat, and every year during which you hold that wheat, until we take it off your hands, we will pay you 10 per cent of the value in wheat. That will mean that if we do not take the

Agriculture

wheat off your hands in 10 years the wheat will belong to you again, notwithstanding the fact that we have already paid you for it."

In that case the farmer would have the grain and the country would have the grain, -and supplies of food of that sort might be of inestimable importance in times just like these. The farmer naturally would take care of the wheat after that. I must confess I simply can see no objection to that policy of dealing with the storage of wheat.

There will be people who will say, "If you lent out all the money which would be necessary to do all that, you would cause inflation." No one would worry about inflation if the farmers sold the wheat to the elevators and got the money. Why should there be any worry about inflation if the farmer had the money with the wheat in his bin? That sounds sensible to me.

The question will arise, where will the government get all the money? I have said time and again that governments can create money, and immediately someone says, "Print it". Did you ever have a $1 dollar bill issued by the Bank of Canada in your possession that was not printed, or a $5 bill that was not printed, or a $50 bill that was not printed? Then why all the excessive excitement over printing, provided the printing is within limits? .

It is time we faced these things realistically. The money does not have to be printed at all. It might take the form of bank credit coming from the Bank of Canada and could be kept in the form of bank credit, deposited in the local bank and transferred from one person to another by cheque. Ninety-seven per cent of all our business transactions today are conducted in that way, with bank credit. I fail to see how on any logical ground there can be any objection to this proposal I have offered.

While we are on that I would point out that the other day-I think it was the day before yesterday-I referred to a most interesting thing that occurred in the 1930's. Japan began to use her national credit to subsidize exports, so she was able to sell her goods in the markets of Britain or any other country into which she could send her goods, cheaply enough to undersell their goods and put their factories right out of commission. She increased her trade 53 per cent in one year. Anyone who will pretend that Japan was doing something which was unsound would certainly be taking many chances.

Just a few years after that we got into a war with Japan, and there was nothing unsound about what she was doing. She could hit with mighty strength. It would not be

Agriculture

surprising if she used her national credit to fix selling prices within her country. We had better check a half dozen times before condemning that as unsound. It would be good for a pseudo-authority on money to go to Japan to find out how she managed things; he should say just as little as possible while finding that out and so have less to be sorry for.

The whole attitude of Canada in respect to her farmers appears to be that it would just break Canadian hearts if they helped their farmers a little. If there is one body of people they just will not help, it is the farmers. It is a capital crime to help them!

The farmers now commit their grain to the wheat board-and we all support the wheat board-and from there on the wheat board does the business of marketing for the farmer and pays the farmer what is left after all the expenses are paid.

For the government to come in and supply a little bit of money to the wheat board with which to do this is apparently, according to Liberal thinking, completely impossible; and I presume according to Conservative thinking it is equally impossible. That strikes one in an ordinary way as being just nonsense. Why the government cannot help is something I cannot see.

Already this afternoon we have been told of the prices paid by various other countries. As I recall it, the hon. member for Mackenzie told us that Sweden is offering her farmers $2.35 a bushel for wheat; Norway, $3.43; Switzerland, $4.19; France, $2.64; United Kingdom, $2.36 and Chile, $4.50. Will someone tell us how he thinks Chile can pay her farmers $4.50 a bushel for wheat when Canada cannot do so? Will someone tell us how he thinks little Switzerland, with an economy far weaker than that of Canada, can pay her farmers $4.19 a bushel for wheat while we cannot do so?

Topic:   AGRICULTURE
Subtopic:   SUGGESTED POLICY FOR STABILIZATION OF INDUSTRY
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July 13, 1955