August 8, 1960

PROCEDURE

CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE

PC

Gordon Minto Churchill (Minister of Trade and Commerce; Leader of the Government in the House of Commons; Progressive Conservative Party House Leader)

Progressive Conservative

Hon. Gordon Churchill (Minister of Trade and Commerce):

Mr. Speaker, I would ask that this motion stand until the question period is over and the report of the civil service commission concerning the House of Commons staff has been dealt with. In other words, it would be the second order of business today.

Motion stands.

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Subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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AGRICULTURE

STATEMENT OF GOVERNMENT POLICY ON ASSISTANCE TO WESTERN FARMERS

PC

John George Diefenbaker (Prime Minister)

Progressive Conservative

Right Hon. J. G. Diefenbaker (Prime Minister):

Mr. Speaker, with the leave of the house I should like to make a statement regarding the western farm situation, which I undertook to do some two weeks ago and have since been awaiting the opportunity to place before the house the views of the government with regard to this matter.

Might I add that, as has been stated, following my statement, certain supplementary estimates will require to be brought to the attention of the house.

On August 30, 1958 I outlined the government's views concerning the development of a national agricultural policy, and pointed out that our concept of such a policy was based on the belief that the national welfare required positive action to meet the basic causes of maladjustment in particular industries and regions. Thus while the agricultural program was designed to be national in scope, it was necessary at all times to be concerned as well with specific regional problems. These regional policies in turn are required to form an integral part of and harmonize with the ends of national policy.

I do not intend to review the policy which I outlined on that occasion nor the achievements that have since been brought about under that policy. I referred to them in general on March 4, 1960. I would simply say that in connection with the broad national aspects of our planned agricultural policy,

the government's intention is to present to parliament further instalments at a subsequent session designed to round out the program which was announced in August, 1958.

On this occasion I wish to deal with one of the regional problems in agriculture which is a matter of particular national concern. I refer to the prairie farm income problem which has arisen from revolutionary changes in technology, world wheat demand conditions and rising costs of production. Partly because of dramatic technological development, more particularly because of the tremendous stimulus given to wheat production by virtually every importing and almost every exporting country, world surpluses have been built up to colossal proportions and the consequence has been a depressing effect on world prices for wheat.

The government has searched diligently for a solution to the question of farm prices which would avoid the evils built into the programs of other countries in recent years. Our determination has been to avoid a cure which would be worse than the disease itself. We have had the benefit of the opinion, in so far as the western grain problem is concerned, of the western members supporting the government, who have continued to place before us their views and have pressed for action in accordance with the situation.

The chief proposal which western farm organizations have advanced for dealing with this problem has been the so-called deficiency payment scheme on western grains. On previous occasions I have endeavoured to show how impossible this proposal would be in relation to a sound agricultural policy, realizing at the same time the necessity of agriculture being prosperous, without which the demands of agriculture or industrial production in other parts of Canada would be greatly reduced, with consequent loss of employment in other parts of Canada.

The summary of the views in this regard is this, as I stated in March, 1960. The government has come to the conclusion that deficiency payments, however attractive at first glance, would not provide a solution to the problems facing prairie agriculture but would indeed create new problems. Deficiency payments applied to deliveries of grain would fail to help those producers most in need and if adopted would require very large subsidies from the treasury, which would

Assistance to Western Farmers inevitably lead to increased surpluses and would add further to the burden of financing the disposal of those surpluses. Such payments would tend to impede essential adjustments to changing conditions of technology and demand which are essential both to the welfare of the producers and to the health of the Canadian economy as a whole.

In other words, the proposal of a fixed support type of deficiency payment would not solve the two main problems of western agriculture, that of income variability and the problem of the small farm. Indeed, it is the considered opinion of those with whom the government has consulted that in the long run the adoption of deficiency payments would have worsened those problems. Our national policy and indeed our regional policies are based on the fundamental principle of aiding rather than impeding essential adjustments to changing conditions of technology and demand.

A measure of assistance roughly analogous to unemployment insurance in industry is economically consistent with our basic policy of ensuring sound adjustments to changing conditions.

There is no way whereby, regardless of efficiency, a guaranteed annual income can be assured. As a result, our policy has consistently emphasized measures to attack the basic problems of agriculture; measures such as export assistance, crop insurance, a vastly improved and comprehensive agricultural credit policy, rural development, conservation and the like. We believe that the basic problems of Canadian agriculture will yield only to long range solutions. Since our national agricultural policy is designed to attack the basic problems of agriculture, I have always made it clear that some time must inevitably elapse before these long range solutions can be fully implemented and before their benefits will begin to raise the standard of farm living. I indicated in August, 1958 that some measure of special assistance to western farmers was justifiable and, as the house will recall, a measure of assistance was provided at that time.

I then discussed one form of special assistance which has always appealed to the members of the Conservative party. I refer to the two-price system. The proposal has seemed to me through the years to have a strong moral justification, while avoiding the dangers of other suggested remedies which, as I said a moment ago, might be a stimulus if not an invitation to increase and further surplus production. Indeed, such remedies among others have been proven to be the chief causes of the decline in world

[Mr. Diefenbaker.f

prices from which western farmers have suffered, as have farmers in other parts of the world.

Under the two-price system for wheat, the domestic price would be above the selling price for wheat on world markets as long as world markets remained substantially depressed. This proposal has quite properly been limited to wheat used for domestic human consumption, since any attempt to impose a domestic price on wheat for feed purposes would simply destroy the market and cause feeders to use other grains or feed products as a substitute. It could not, of course, apply to wheat produced for export. That would be financially impossible.

But attractive as the two-price system is, there have always been dangers and obstacles in the way of its implementation. Those who are primarily concerned with the maintenance and expansion of Canadian markets have pointed out that the establishment of a high domestic price would leave Canada in a vulnerable position when this country requests restraint on the part of other countries which subsidize wheat production and wheat exports. It has also been argued that as long as Canada is selling wheat to domestic consumers at the same price as it is willing to sell wheat abroad, no one can criticize the basis of our participation in export markets.

In opposition to this view, some farm organizations have over the years contended that the Canadian consumer has been getting wheat too cheaply. They argue that while the Canadian wheat producer must export his wheat at world prices, even if those prices are depressed, he should at least receive a fair price for that portion of his wheat sold in the domestic market for human consumption. They point historically, and with justification, to the unique burden imposed by government policy on wheat growers during the war and post-war years, resulting in domestic and export prices far below prevailing world levels.

This government, to fulfil its national and regional responsibilities, must take all points of view into account. On the one hand it must avoid doing anything that would impair the access of Canadian wheat to world markets, for if the world markets were lost nothing, and certainly not the Canadian government, could save the western wheat economy. On the other hand, the western farmers have a case against the continuation of a system in which the price of wheat sold for domestic consumption is set by depressed world prices.

This is a dilemma which this government has searched long and diligently to resolve. At times we have felt that in this search we

have received less constructive help from some western farm spokesmen than we might have expected. But be that as it may, we have been determined all along to resolve this dilemma and to extend a justifiable measure of assistance in a form which would not cause greater difficulties than those it was intended to resolve.

We have reached the conclusion that to attain the ends sought by the two-price system, while avoiding its inherent difficulties, the best way would be to bring about this year an acreage payment similar to that instituted in 1958. The government proposes, subject to the approval of parliament, to make an acreage payment of $1 per cultivated acre, up to a maximum of 200 acres, as shown in the western farmers' wheat board permit books. On the basis of the similar payment made in 1958, this will amount to between $41 and $42 million. This is an amount roughly equal to the average of what the western farmer would get if a two-price system for wheat were put into effect.

I wish now to say a word with regard to the liaison on committee. Since the government's rejection of deficiency payments in March the liaison committee of the western farm organizations has requested' a further meeting with the government to discuss alternatives to the form of assistance they had originally requested. Immediately after they made their first request in this regard they were communicated with and asked that they put in a specific alternative in writing so that it might be studied prior to the meeting. In doing this there was in no way an abdication on the part of the government of its responsibility. It was simply giving to them an opportunity to make their representation if they had such an alternative.

The reply we received was in the form of a brief dated May 10, which went into particulars on three proposals or arguments. The brief ended with a statement that the group were prepared to discuss acreage payments. The government will continue to give consideration to action which may be taken to meet the welfare not only of the western wheat farmer but farmers elsewhere in Canada. In so far as the former are concerned, we will meet with the liaison committee. I think it will be desirable that the three ministers from the western provinces meet with them. If desired I will join them to meet this committee so that its views may be secured in addition to any that were expressed in the brief to which I have made reference.

In concluding, I simply want to say that this proposal I have just presented will, I believe,

Assistance to Western Farmers bring about a measure of justifiable assistance this year to western growers. At the same time it will avoid doing anything that would impair the access of Canadian wheat to world markets or impede the necessary adjustments in the wheat economy resulting from the causes mentioned earlier. This is not a hand-out in any sense of the word. We hope this measure will not only provide some assistance in meeting a difficult regional problem but also, within the context of our national policy, a basis for a stronger economy in Canada.

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LIB

Paul Joseph James Martin

Liberal

Hon. Paul Martin (Essex East):

Mr. Speaker, it has not been easy to follow the words of the Prime Minister. Obviously he was embarrassed by the delay attending the announcement which he has made today. He sought to defend himself by a series of words which cannot be described other than to say they were understandably tortuous.

The Prime Minister is dealing with a matter today which will be discussed, of course, in considerable detail when the item on which it is based is presented to the house, but in view of the character of the announcement and its belated nature the Prime Minister, I know, will be among the first to expect me to say a word or two.

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PC

John George Diefenbaker (Prime Minister)

Progressive Conservative

Mr. Diefenbaker:

I anticipated that.

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LIB

Paul Joseph James Martin

Liberal

Mr. Martin (Essex East):

The Prime Minister says this is the first opportunity he has had to make this announcement. Of course the Prime Minister forgets easily-I know he does not forget intentionally-but a whole series of questions were addressed to him and to the Minister of Agriculture during the course of this session, all with the intention of trying to elicit from the government some reaction to the representations which were made by 1,000 western farmers over a year and a half ago. The announcement of today had its genesis in that mass movement of western farmers, who were met with a refusal by the government to accept their proposal for deficiency payments. The Prime Minister must be aware that in the brief presented at that time there were three other proposals of an alternative kind about which the government has made no comment whatsoever.

Since that time the Minister of Agriculture has stated on several occasions that the government's action was predicated on the submission by the western liaison committee of proposals which the government would consider; and having considered them, then an announcement would be made by the government, but not until the farmers of western

Assistance to Western Farmers Canada themselves had formulated a policy would this government itself decide on which policy it should embark.

This announced program of acreage assistance of $1 an acre up to a maximum of 200 acres, bringing the total cost to the federal treasury somewhere between $40 million and $41 million, as the Prime Minister noted, is precisely the same as the plan announced in 1958, but not pursued in 1959 by the government. The Prime Minister referred to the submissions made by the western liaison committee on May 10, and he said that in those submissions they had proposed acreage payments. It is significant that in the same submissions not only did they put forward that as an alternative plan, but they also requested an opportunity to meet with the Prime Minister and his cabinet colleagues to discuss the question at the Prime Minister's early convenience.

That was on May 10, and on August 8, 1960, the western liaison committee has not yet been given an opportunity to meet the government to present the requests made on May 10. It is no wonder that farm leaders all over western Canada, as we now know from the records of this house, have expressed their dissatisfaction with the government for refusing to meet with them to discuss alternative proposals. What we have today is not what the people of Canada were led to believe in 1957 the farmers would receive. This is not in line with the Prime Minister's declaration "Parity, not charity"; this is a policy of stand-off and hand-out, and there can be no denial of that fact.

I am sure the hon. member for Rosthern, who so courageously spoke up against the refusal of the government to live up to its election promises, will join with the many thousands of farmers in western Canada in protesting at the meagreness and insufficiency of this particular program. These farmers will remember the words of the Prime Minister when he said, "We will assure the farmer of his fair share of the national income by maintaining a flexible"-I underline the word "flexible"-"price support program to ensure parity for agricultural products based on a price-cost relationship". This program does not deal with the elimination of the cost squeeze. The Prime Minister today acknowledged the rise in the farmers' production costs.

This statement is made in the face of the fact that net farm income for 1959 is below that of 1958. This statement is made in the face of the fact that western farmers, as indeed all farmers in Canada, do not recognize in government policy, in government delays, in government procrastination, the realization of the assurances they were given.

The Prime Minister seeks to clothe this regrettable state of affairs with a so-called over-all policy. He says that further aspects of this policy will be discussed at the next session of parliament. He interlarded what he had to say by mentioning the fact that the government brought in crop insurance, forgetting of course that only one section of one province in Canada has thus far taken advantage of the federal plan.

Topic:   AGRICULTURE
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?

An hon. Member:

That is their fault.

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Peter Francis Martin

Mr. Marlin (Essex Easl):

That is the fault

of the inadequacy of the government's program on crop insurance; that is the result of the government's failure to face-

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Subtopic:   STATEMENT OF GOVERNMENT POLICY ON ASSISTANCE TO WESTERN FARMERS
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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming (Eglinlon):

What about your 22 years of delay and no crop insurance plan at all?

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PC

Daniel Roland Michener (Speaker of the House of Commons)

Progressive Conservative

Mr. Speaker:

Order. I would ask hon. members not to depart into the area of crop insurance, which was not the subject of this statement.

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Subtopic:   STATEMENT OF GOVERNMENT POLICY ON ASSISTANCE TO WESTERN FARMERS
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Peter Francis Martin

Mr. Marlin (Essex Easl):

With respect I did not depart into that area; it was part of the Prime Minister's speech. He himself referred to crop insurance; that was part of the so-called grand plan of attack by the government to meet economic conditions-

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PC

James Russell Keays

Progressive Conservative

Mr. Keays:

And they are being met.

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Subtopic:   STATEMENT OF GOVERNMENT POLICY ON ASSISTANCE TO WESTERN FARMERS
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Peter Francis Martin

Mr. Marlin (Essex Easl):

My hon. friend says they are being met. I am sure when my hon. friend goes back-

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Subtopic:   STATEMENT OF GOVERNMENT POLICY ON ASSISTANCE TO WESTERN FARMERS
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PC

Daniel Roland Michener (Speaker of the House of Commons)

Progressive Conservative

Mr. Speaker:

Order. If the hon. member will permit me, I would ask the hon. members not to interrupt the hon. member who has the floor. This is not a debate. This matter will be dealt with on the supplementary estimates when they come forward. The hon. member for Essex East is making a statement in connection with a statement made by the Prime Minister.

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Subtopic:   STATEMENT OF GOVERNMENT POLICY ON ASSISTANCE TO WESTERN FARMERS
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Peter Francis Martin

Mr. Marlin (Essex Easl):

I was going to say, before you properly intervened, Mr. Speaker, that when the hon. gentleman gets back to his constituency he will see whether or not the farmers of Canada agree with his statement that these promises are being met by the policies of the government.

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Subtopic:   STATEMENT OF GOVERNMENT POLICY ON ASSISTANCE TO WESTERN FARMERS
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PC

Daniel Roland Michener (Speaker of the House of Commons)

Progressive Conservative

Mr. Speaker:

Order. I hope the hon. member who has the floor will not be diverted by the interruptions which I have asked hon. members not to make.

Topic:   AGRICULTURE
Subtopic:   STATEMENT OF GOVERNMENT POLICY ON ASSISTANCE TO WESTERN FARMERS
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Peter Francis Martin

Mr. Marlin (Essex Easl):

Topic:   AGRICULTURE
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August 8, 1960