Mr. Johnson (Kindersley):
Before the lunch hour, Mr. Chairman, and before the passing of the amendment proposed by the Minister of Agriculture, there was considerable discussion on the factor of cost of production. I believe this has been the focal point in
the whole debate on the agricultural stabilization bill. There have been requests from farm organizations, members of the C.C.F. and Social Credit groups and from members of all political parties for the application of a cost-price formula to the bill which will ensure the farmer a fair return. It has been pointed out that during the past ten years there has been a cost increase to the farmers of 50 per cent, whereas in the case of the western farmer there has been a decline of 21 per cent in the prices they have received during the same period. It is therefore evident that this cost-price relationship is, as I say, one of the focal points of the argument and the term cost of production becomes very important.
I feel convinced that the term "cost of production" in the bill as it was originally introduced by the Minister of Agriculture was one which caused much concern to members of this group. That was also expressed in a press statement of the Canadian Federation of Agriculture issued on December 15, 1957, as follows:
The Canadian Federation of Agriculture has repeatedly urged that there should be a formula in the bill to be used as such a guide, and that the formula should compare prices received by farmers with the cost of goods and services which the farmer must buy. This is commonly referred to as a parity formula.
It is apparent that the criticism stems from the failure of the Minister of Agriculture in initially drafting the bill to include a clause relating the cost of production to the price received, and I think it is very significant that, as a result of complaints lodged by the Canadian Federation of, Agriculture, the interprovincial farm union council and also voiced by members of this house, that all the amendments to the bill were introduced on December 14. The term "cost of production" was placed in the bill in two instances. In the preamble we have the term "cost of goods and services" and in clause 2, subsection (2), we have introduced the term "cost of production". It is significant, then, to follow this one step further and note that this term was placed in the bill and that the interprovincial farm union council made a representation with respect to the agricultural stabilization bill, Bill No. 237, on January 7, including the following submission:
The beard shall establish support prices for commodities by determining the cost of production of any commodity on a regional basis and such price will be the guaranteed price for such commodity for a prescribed period.
Here again we have the term "cost of production". I am firmly convinced it will be one of the deciding factors with respect to the beneficial results of this bill.
Agricultural Products-Price Stabilization
The minister proposes to make further amendments which will include the term "cost of production". I think if we review the record of speeches made on this subject we will find this term appearing with extreme regularity, in fact I notice that in replying to a question before the lunch hour, the minister himself used it three times in a very short paragraph. It will, I believe, appear at least once in each sentence, and the minister has made use of this term on several other occasions. We noticed also that the Prime Minister used the term "cost of production" yesterday and that it was also used by the hon. member for Bow River this morning. All hon. members have used it and all hon. members will recognize the importance of the term because it is used by farm leaders and farm organizations throughout the country.
Clause 2 of this same bill to which we are referring states that the governor in council shall be guided by the estimated average cost of production. There again we have this same term appearing in the bill before us and it appears in a further clause dealing with requests that there should be a relationship to the cost of production.
I might ask the committee just what does this term "cost of production" mean? Does it apply to the cost of the land or to the cost of the fuel the farmer must use to produce his commodities? Does it allow him a reasonable profit? Is it related to a specified period? Are we referring to cost of production for a specific commodity and applying that to all farmers?
If I might be allowed to quote the Prime Minister once again, when he was speaking on the Agricultural Prices Support Act on July 29, 1944, he had this to say as reported at page 5600 of Hansard:
But if this bill is to be anything more than the promise of a hope, there must be something in it to show that the prices farmers are to receive will assure them of reasonable costs plus a fair return.
Here again we have that same factor coming forward-cost of production. It is most necessary that this be clarified for the benefit of the members of this house and without elaborating on it any further I am going to move an amendment, an amendment which will place the definition of cost of production among the definitions in this bill. I am certain this amendment cannot be ruled out of order on the ground that additional expenditure will be involved. I think in all probability the minister will accept the amendment as correcting an oversight which has been made in the further amendments he has introduced and that it will be readily recognized that in the first
draft of the bill the term "cost of production" was not involved. It was introduced into the bill in the amendments which the Minister of Agriculture made at a later date, and it therefore becomes necessary to define in the bill this term, giving guidance to those who will later be called upon to administer the act.
I might say at the outset that I think it is very difficult to define cost of production, but I have had the good fortune of having a university education in agricultural economics. I have also been associated with the subject and have discussed the matter with my colleagues who have also had this training, together with men in technical agriculture. We have concluded that the definition of cost of production should be as I will now state and I therefore move, seconded by the hon. member for Humboldt-Melfort (Mr. Bryson):
That subclause (1) of clause 2 of BUI 237 be amended by Inserting therein immediately after subparagraph (c) the following new subparagraph:
"(d) 'cost of production' means the cost of all goods and services necessary to the production of the commodity and shall include a fair return for investment and labour;"
and by relettering subparagraphs (d) and (e) as subparagraphs (e) and (f).
It is apparent, as one analyses the definition which I am requesting be placed in the interpretation clause of this bill, that we are providing the farmers with a price which will meet their costs of goods and services used in the production of a certain commodity and will give them a fair return after their investment and cost of labour. This is a very reasonable definition and one for which I am certain members of the civil service staff, members of the government and others will be extremely grateful in their administration of this bill. As a result I am more than certain the farmers across Canada will be grateful if this amendment is accepted and approved by the minister or by the house, as the case may be.
I think I should point out that the majority of members are of the legal profession and it should not be necessary for me to convince them of the desirability of having this term defined in the agricultural stabilization bill. Those of us who are practical farmers will certainly support it in the terms used by the Prime Minister when he was speaking in 1944 and when he used the expression "if the bill is going to be something more than a promise of a hope".
Therefore, Mr. Chairman, I will conclude my remarks by asking the minister to accept this amendment, which I am certain is in order and which will follow up the principle we have been trying to emphasize in our discussion of this bill, that is, to improve it and
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Agricultural Products-Price Stabilization make it a better bill for the farmers across Canada. The minister himself has said he does not expect that this measure is complete in every detail, and his remarks were reiterated by the Prime Minister when he spoke yesterday. I am suggesting that by making this amendment now we will be saving hon. members of this house and farmers across Canada some difficulties which no doubt they will experience on some future occasion through lack of this definition.
Subtopic: MEASURE TO PROVIDE GUARANTEED PRICES FOR CERTAIN COMMODITIES, ETC.