Mr. Schreyer:

Thank you, Mr. Chairman. It is all very well to talk about the problems of various sectors of our economy. It is all very well to talk about agricultural problems and to give smooth assurances of sympathetic consideration and probable action, as the minister likes to give from time to time, but clearly, after the passage of more than two years, the time has come for the minister to produce.

Hear, hear.

Mr. Schreyer:

The government should do nothing less than allocate substantial amounts of money, in a selective manner, for the purpose of stabilizing the production of various agricultural commodities and improving the income positions of the producers. This must be done because in many ways Canadian agriculture is in dire straits. The agricultural industry is so vital to this country and the portents of what is happening are of such consequence to the Canadian people that the minister will be excused if the government for a change takes drastic and meaningful action. It must do so now.

Mr. Muir (Lisgar):

Mr. Chairman, I should like to say at the outset that while one may have much sympathy for the minister, when the industry which he represents in the cabinet is in serious trouble one cannot extend

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sympathy to the government. Through indifference or lack of understanding the government's policy or, to put it more properly, the government's lack of agricultural policy, has been tantamount to an exercise in futility in solving the immediate problems of farmers or in attempting to bring about long-term solutions of their problems.

The minor changes the government made to legislation that was eight years old when it took office seem to have added to farmers' difficulties instead of alleviating them. For example, one might mention the plight of western cream shippers and the local dairies that service them. One could go right down the list through every sector of the industry and find the same situation. The industry struggles to meet competition from commodities that have been produced abroad under subsidy. Usually they are surplus commodities. This struggle takes place under circumstances for which the government must take much responsibility. I refer to tight credit, higher interest rates, lower prices, higher production costs and lack of adequate cash for working capital. The old adage that none are so blind as those who refuse to see is still true. As a previous speaker said, this government does not have the answers to our agricultural problems because it does not understand them.

The low grain delivery quotas now in effect at prairie elevators are causing a great deal of concern to western farmers. When we compare today's situation with the situation one year ago the cause for this concern becomes apparent. Three hundred and ninety-four elevators in western Canada are now on a three bushel quota, 1,071 are on a four bushel quota and 387 are on a five bushel quota. At this time last year only 726 elevators were on a quota of five bushels or less. The remaining 1,156 elevators were on quotas of six to eight bushels.

The disparity between the farmers' cash position this year and last year is evident. Cash advances, while helping to pay some fall expenses, do not alter that position since cash advances were available last year also. The gravity of the situation is compounded this year because of higher interest rates and because farmers cannot obtain farm improvement loans at statutory rates of interest.

Much though one wants to see some improvement in the grain delivery situation, the cold, hard fact is that deliveries will more than likely slow to a trickle. In their recent

market letter James Richardson and Sons, Winnipeg grain merchants, said:

Stocks of all grains and oil seeds in country-elevators are now over 295 million bushels, within about 15 million bushels of full working capacity, and the off-farm movement will soon be slowing down considerably as elevators become congested.

Shipments east have practically come to a standstill as there is enough grain in the pipe line to fill the terminals at the lakehead, and outward shipments to the Pacific coast have slowed down recently.

With our wheat-flour exports down by approximately 160 million bushels compared with the same period last year, the outward movement of wheat is the lowest since 1956. The figures I have quoted were published in the Manitoba Co-operator of February 22 and seem to indicate that we cannot look for any decided improvement in the foreseeable future.

[DOT] (4:50 p.m.)

All of this means, of course, that the farmers cannot expect any immediate alleviation of their cash position. No doubt the government is hoping that the final payments on last year's grain pool will help the situation, and to some extent they will. However, the bulk of these payments are on wheat and are not expected until near the end of the current month. They will be needed to finance spring operations and very little will be used to pay accumulating bills. The farmer who grew a good crop in the past season but who suffered crop losses in the year covered by the pool will certainly not be in a very good position to start spring operations if he cannot realize more cash from the grain he has had to store in his bins.

It has always seemed to me that one responsibility of good government is to create an economic climate in which the various segments of our economy can operate efficiently. Such a government would take whatever steps might be necessary to achieve that objective. This does not always entail large government expenditures, but it would entail understanding by the government of basic principles of good economic husbandry.

In the case of modem agriculture, efficiency can only reach its highest level with a reasonable amount of available working capital. If working capital is cut off because of the inability of the producer to market his produce at a given time, other means must be found to overcome the difficulty.

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Fortunately, so far as wheat is concerned we have machinery already in operation to supply funds in advance of delivery. Unfortunately, advancing costs have made the amount available inadequate. I am pleased to see the Minister of Trade and Commerce here. He suggested to me the other day that this was a matter for discussion between the department and the wheat board. But I think it would mean an amendment to the Prairie Grain Advance Payments Act before larger cash advances could be made. The Canadian Federation of Agriculture in its submission to the government has recommended that the Prairie Grain Advances Payment Act be amended to allow advances to be made on wheat, oats and barley to a maximum of $4,500 a figure which is quite realistic under the circumstances considering the low delivery quotas.

It is not my intention to point out how similar situations in other fields of agriculture can be resolved. Other speakers more qualified in their respective areas will be presenting their views during this debate. I would, however, again bring to the attention of the minister, as I have on other occasions, the serious effect which the heavy importation of vegetable oils is having on the sunflower industry in Manitoba.

Past experience has shown that the industry is able to overcome a surplus situation with the assistance of a floor price at very little cost to the treasury. As a matter of fact the one and only time a floor price was set it cost the government something like $40,000-I think the exact figure was $44,000-which is a very small price to pay for saving an industry. I hope the government will see fit to give serious consideration to this question and to the extent to which the importation of foreign oils is affecting our domestic vegetable oil market.

Recently the Lower Red River Valley Water Commission sent a brief to all federal cabinet ministers urging the government to accept the recommendations of the International Joint Commission in regard to the construction of the Pembina river project. I hope the minister took time to read his copy of the submission because of the importance of this project to the economy of the area in assuring adequate supplies of water for irrigation, industry and conservation. The protection it would afford the large area of rich farm land contained in that part of the Red River valley from disastrous and expensive flooding would

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bring benefits which would outweigh the initial cost. I would hope the minister would give his unqualified support to this important project.

Finally, I should like to express my disappointment to the minister that the excellent work under the Prairie Farm Rehabilitation Act, which has provided water storage dams throughout the prairies since its enactment, has apparently been brought to a standstill. If it is because the government has not decided under which department the legislation will continue to operate, as I have been led to believe, then I think it is time a decision was made. If it is because the government is contemplating bringing in a water resources act before proceeding further with this type of work, I hope the necessary legislation will be brought down as soon as possible. The main thing is that works so important to the economy of the prairies should not be further delayed because of government uncertainty and inaction.

Mr. Godin:

Mr. Chairman, previous speakers have clearly explained the problems both serious and urgent, now facing the farmers.

I do not intend to go over the details again, but nevertheless, those problems must be considered in the light of the whole economic situation in Canada. We are therefore justified in expressing our deep concern about the slowing down in numerous sectors of our economy, which threatens to expand and develop into a real crisis.

Higher interest rates and budgetary restrictions are so many factors which contribute to the shortage of capital now affecting the Canadian economy.

Since policies of austerity generally have adverse effects on less privileged classes, I feel that the period we are now going through could jeopardize the situation of agriculture which is already deep into debt, at the very time when farmers are faced with increasing production costs and must increase their production through further investments.

In my opinion, the situation in which farmers find themselves is definitely inferior to that of other groups, in spite of the numerous efforts made to improve their lot. Such a situation cannot and must not go on any longer, since it is causing a steady decrease in the number of farmers, without for all that improving the lot of those who remain on the farm.

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In spite of the ever fine words and high-sounding statements about the importance and the value of agriculture, parishes which, in the past, owed their prosperity to agriculture now only survive with the help of welfare allowances.

Due to the lack of an adequate policy which would anticipate problems rather than create them, whole sections of parishes are being abandoned because of inadequate income. Some of those farmers looked to the department of health, and they were given help providing they abstained from any activity.

Also, agricultural experts, from both federal and provincial governments, are constantly engaged in research to improve agriculture. They have discovered new breeding and feeding methods. They publish all the new developments in agriculture, such as insect and weed control. All these experts are busy making the farmers understand that they would really increase their profits by increasing their herds.

The present situation, which has existed for a long time, shows that increased efficiency alone is not the solution to the urgent problem of a better income for the farmer.

For some producers, such as hog and poultry farmers, that is the egg producers, large herds or flocks have proved disastrous.

Mr. Chairman, we had with us last week Mr. Lionel Sorel, general chairman of the U.C.C., an organization built up by the Quebec farmers. As you know, Mr. Sorel is also vicechairman of the Canadian Dairy Farmers' Association and of the Canadian Federation of Agriculture, and this was the reason for Mr. Sorel's visit to Ottawa.

This association submitted a brief to the Prime Minister (Mr. Pearson) and the members of the cabinet. This brief was brought to our attention at a meeting of our group.

Mr. Sorel was not present at this meeting, for a good reason, I am sure, but we had an opportunity of ascertaining his views on the present farming situation.

Even though we were unable to meet Mr. Sorel, still it has been proved that Mr. Sorel is well acquainted with the problems of agriculture.

In the interview he gave a reporter for Le Droit, which was published in that paper on Friday, March 1 last, Mr. Sorel made the following statement with which I agree:

[DOT] (5:00 p.m.)

The farmers' problems are always the same. The challenge they must meet is always that of

increasingly higher production costs, on the one hand, and selling prices which, for them, seldom or never change, on the other.

In fact, the farmer has two sets of costs to meet, his rising personal costs and his costs of production, Mr. Lionel Sorel, president of the Catholic Farmers Union of Quebec, said on Wednesday. Other workers, who are not directly concerned with production, do not have to cope with one of those two sets of rising costs, explained Mr. Sorel.

Mr. Sorel was in Ottawa at the time, in connection with the presentation of the annual brief of the Canadian Federation of Agriculture to the federal cabinet.

Here are a few points, taken from the brief of the Canadian Federation of Agriculture, which the president of the C.F.U. brought out: the need for consultation; the problems of the dairy industry in eastern Canada, the production of wheat in the west; farm loans and improvement, taxation, medicare and, finally, marketing.

Mr. Sorel indicated, on the same occasion, that to his mind:

-the farmers' appeal to the government was ill-timed this year because of the political crisis in Ottawa.

Mr. Sorel felt that the price of manufactured milk should be $5 per hundredweight. He said:

-the goal remains a minimum price of $5 per cwt. for manufactured milk. Even after three years of efforts and partial success, that objective has not been attained.

Indeed, Mr. Sorel is convinced that the average price of milk in 1967 was somewhere in the vicinity of $4.65.

Further on, Mr. Sorel pointed out another problem, namely that of marketing.

With regard to marketing, which in a way is to the farmer what collective agreements are to the worker, the president of the Quebec union said that the government of his province should soon come to an agreement with the federal government to eliminate the harmful effects of foreign competition.

He said that today competition comes both from foreign countries and the other provinces.

Mr. Sorel stated that the appropriate solution could probably arise from a delegation of powers between the two levels of government in Canada.

About the attitude of the Union nationale government in Quebec with regard to agriculture, Mr. Sorel had this to say: "I do not find it very constructive. We are not really told the truth.

People say: We want our rights. But concrete solutions are never put forward."

According to him, communications between the federal and the Quebec departments of Agriculture have decreased since the defeat of the Liberal party in June 1965.

Since I had been told the night before at a dinner with Mr. Sorel and an influential member of the cabinet, I feel that his

March 4, 1968

reference to the defeat of the Quebec Liberal party and the attitude of the Quebec Union Nationale was a declaration of love.

I feel also that it is rather easy to say at a given moment that co-operation is lacking. But when did that happen in Quebec? Did it become obvious in 1964, 1965 or 1966?

For instance, under ARDA, a joint program of the federal government and the provinces, Ottawa allocated $11 million for Quebec whereas the provincial contribution did not exceed $3 million. Everyone knows that funds are lacking.

As far as co-operation is concerned, I am always reminded of that young man who decides to get married. If he makes $125 a week he has a much better chance to find someone willing to co-operate than if he gets only $25 in unemployment insurance benefits.

One remembers the years between 1929 and 1939, when good farm hands earned a dollar a week and a great number of young people in the cities had to make do with the dole. At that time, it was very difficult for the farmer who wanted to set up his own home to find someone willing to co-operate. But when the war came along, wages rose, and Canadians all found someone willing to co-operate and set up a home. As you know, there was no pill at the time, and co-operation was one hundred per cent.

Personally, before I came here, I drove, as a worker, a $200-$300 car, and even if you had offered me a 50 per cent subsidy on a $6,000 Cadillac, I would not have accepted, for I could not even have paid my share. On the other hand, if the hon. minister gave me the same deal today, I would be willing to co-operate, because I have earned a steady salary these last few years.

Mr. Chairman, the problem of the farmers, whether in the eastern, central or western provinces, is a financial problem. Efforts are made to obscure the issue by various means; it is said that the difficulties are due to the political crisis which occurred in Ottawa, or to a lack of co-operation, whereas in fact they are due to a lack of money. Instead of dealing with the real problem, everything is being done to evade the issue. All those who want to speak on the subject are given ample opportunity to do so.

[DOT] (5:10 p.m.)

In Quebec, people say: Things are going badly because you are being robbed by the English. Supposing that such is the case, we must still admit that there are honest people as well as thieves among all races.

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There are honest people among the Jewish, Italian, Canadian or English people. Whenever the province of Quebec complains about the Englishmen, I should like to know, for instance, who has been swindling the English people in Nova Scotia.

I should like, at this stage, to make a short comment on a brief submitted to the joint committee of the Senate and the House of Commons on consumer credit. As can be seen on page 2964, No. 39 of the committee proceedings, the brief was dealing at that time with the housing problem and with personal income in Nova Scotia. This is something I wish to point out, since these people in Nova Scotia are Englishmen.

The brief states the following:

The first factor that must be considered when discussing the housing situation here is that incomes are generally lower in the Atlantic region. Average incomes in this province run 25 per cent lower than the national average. Nova Scotia, then, has more than its share of poverty.

In a previous paragraph, one can read that:

One fifth of all homes in Nova Scotia are overcrowded, without running water, bath or shower. Over one fifth of all homes do not have flush toilets. The number of homes requiring major repairs here is twice that of the national average.

Further on, we can read the following:

This is an old province and the last one hundred years have not produced the expansion and growth experienced in most areas of this country. As a result of the stagnant population and industrial growth situation, our housing stock has remained much as it was 50 or even 100 years ago. Many of these old homes have been maintained so that they will not appear in bad housing statistics, and therefore distort these figures. Most of these very old; wood structures, residential and commercial, while sound, are not attractive.

A portion of our housing stock must be demolished and a much greater portion restored if our communities are to become more attractive.

That report was submitted in 1967, when the hon. leader of the official opposition (Mr. Stanfield) was the premier of his province. When all is said and done, we realize that really pitiful conditions existed there. Nevertheless, since the arrival of the hon. Leader of the Opposition on the federal scene, newspapers try to make us believe that conditions are different, and they never speak about the problems of Nova Scotia.

We are told that the Leader of the Opposition has been successful in everything he undertook. Another day, we read in a newspaper that the hon. member initiated a campaign against the government. But with

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regard to poverty in his province and its slums, I think that he should have started by bulldozing those slums before coming here to bulldoze parliament.

At all events, I repeat that the farmers' problem is not one of honesty but a financial one. The problem of starvation is not a problem of honesty either, but a financial one. The agriculture problem is not a problem of production but of consumption. Mr. Chairman, I wonder how farmers will manage to make both ends meet in the coming years. We realize that all classes of society lack the necessities of life.

We know that crop insurance, accepted by other provinces three years ago, has been accepted by the province of Quebec only this year.

We know also that the cost of this insurance is shared equally by the federal government and the provinces; that is, Ottawa pays 50 per cent and the provinces, 50 per cent. As for the premium, 25 per cent is paid by the federal government and 25 per cent by the provinces. Finally, there remains only 50 per cent to be paid by the farmer, by the person concerned. In spite of all that, Quebec has not been able to implement its plan earlier because of a shortage of money. Today, it is obvious that the minister should not wait for the provinces, should not flounder in joint programs, because under the present system, the provinces have become poor relations.

I do not know the intentions of the minister with regard to the continuing rise in the price of farm machinery. I do not know what will be his policy in the face of the farmers' requests for a price of $5 per hundredweight for milk. I do not know what will be his policy with regard to quotas which will be favourable or unfavourable to farmers who want to increase their revenue.

We know that the minister has decided to reduce cheese subsidies as well as subsidies on sheep and hog production on account of an inadequate budget.

I would like to remind you, Mr. Chairman, that during wartime there was never any mention of an inadequate budget. We did not wait until the government had collected taxes from people who were unemployed to declare war. We went right to the source, namely the Bank of Canada.

We also remember that price support was extended throughout Canada and in spite of the shorage of manpower, Canadian production increased to such an extent that it was used to feed part of the world.

We also remember that millions and millions were granted as assistance to Great Britain. I feel that this gesture could be repeated and would be an appropriate opportunity for the Minister of Agriculture (Mr. Greene) to launch war against poverty. In view of the fact that England does not need any more of our gifts and that present subsidies are inadequate, I think that the hon. minister could consider granting a special discount, paid with new money, on all Canadian consumer goods. That discount could be paid on every food item produced and consumed across Canada. What was good for England would be good, I assume, for the whole Canadian people and it would be accepted by them.

When the government used the Bank of Canada, it was for the war effort. Of course, to use the Bank of Canada today would run counter to old habits. This always requires an effort, but, in my opinion, it would be an effort in the right direction. The minister could depend on the support of all the people, and in view of the fact that the farmers would be involved indirectly, he could depend also on the support of Mr. Paul-Henri Lavoie, general secretary of the C.F.U. who, it is a known fact, is one of the directors of the Bank of Canada. Since the agricultural class would be assisted indirectly with that new formula, I am convinced that Mr. Lavoie would be very happy to give his support to such an initiative. I imagine that Mr. Lavoie who is secretary of the C.F.U. and a director of the Bank of Canada, does not wish, any more than the hon. minister and myself, to see the appearance of a period similar to that of the years 1929 to 1939.

Mr. Ricard:

Mr. Chairman, I do not want to delay any longer the business of the house, but I am glad to have the opportunity of saying a few words on the subject of agriculture in Canada.

It must be recognized that the minister's task, as he presides over the destiny of the Department of Agriculture, is a very arduous and important task indeed.

I shall not spend the time at my disposal in taking him to task, but I will rather use the few minutes available to me to make a few suggestions, together with a few suggestions to improve the well-being of our rural population in general.

We know, Mr. Chairman, that for the last few years, farming has been going through a

March 4, 1968

period of considerable development and transformation. Production methods have changed drastically. Machinery itself is changing from one year to another, which is not without creating very serious problems both to the farmers and to those who want to promote agriculture in the country.

[DOT] (5:20 p.m.)

The number of farmers has gradually been reduced in the last few years. Several marginal farms no longer exist and several more will disappear. That is why there is a need for close co-operation, not only between the federal and provincial departments of agriculture, but also between other departments. A close spirit of co-operation should exist between the two levels of government, and I hope that the Minister of Agriculture (Mr. Greene) will be willing to co-operate as fully as possible to prevent farmers from suffering losses through lack of co-operation at some stage of the discussions.

As things are at present, there should be continuous consultation between the various departments. It is to be hoped that we will see a continued improvement for the greater general good.

One of the main success factors for a farmer is doubtless the facility to get the necessary credit so as to equip and manage his farm. For several years, the Canadian Farm Credit Corporation has rendered great services to farmers, but, I think, we have reached a point where the act should be amended in order to enable farmers to take better advantage thereof.

I do not think it is slander to suggest that many times, the officials responsible for implementation of the Farm Credit Act do not protect the farmer's interests sufficiently. One would think that the sole purpose of some officials is to protect the government, which is much too rigid.

I know several farmers who have complained of their treatment. There was not enough confidence placed in them and they could not obtain the amounts which would have enabled them to develop their farm so as to make it profitable.

It is a fact that the farmer is generally a good risk. And I think that if banks could obtain interest rates in accordance with modern requirements, they would readily grant more loans to farmers. Therefore, I would urge the minister to use his power of persuasion to convince the officials dealing with agricultural loans, to have more confidence in

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farmers applying for an agricultural loan, because they are creditworthy.

It seems to me, we should have a special concern for the young farmers, who want to settle on the land. The minister knows also how few of our young people look to agriculture for their future. Those who would like to become farmers have great qualities, but often they are prevented from carrying out their plans, because their father cannot give them the money required to settle on their own land. In many families, more than one son wants to settle on a farm, but the father whose land is limited, cannot logically and equitably help all his sons to become farmers.

To my mind, that is where the farm credit bureau could be of great assistance, not only to the farmers who wish to borrow, but also to the nation as a whole.

It must be recognized that it is the farmers who feed the nation. If we place ourselves in a situation where sooner or later we have to get our supplies from foreign sources, it will surely be to the disadvantage of our people. [DOT] (5:30 p.m.)

Mr. Chairman, I should like to speak, for a few moments, on the dairy industry. We know that this is a very important industry in Canada because it represents 40 per cent of the farmer's income. Therefore, we have the right to pay it a very special attention.

We know that in recent years, because of a policy that did not meet their demands, many farmers sold their cattle to devote themselves to other agricultural fields. The result was that interested farmers were handicapped and that many plants had to close down because of the lack of raw materials.

I would like hon. gentleman to pay a very special attention to the recommendation made to him by the C.F.A. We know that the C.F.A. presented last week to the cabinet its annual brief in which it repeated the request made last year and the year before, that it is absolutely necessary for the farmers to get a price of $5 per hundredweight of milk.

Indeed, the C.F.A. says in its brief that this price of $5 per hundredweight is even more necessary today than in previous years, because the cost of production is always increasing. We know, for example, that the average price which the Canadian farmer received last year amounted to $4.65 per hundredweight. It is easily realized that the request of the agricultural organization is reasonable and that the government should take measures at once to enable the farmers

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to get this price. It is essential that the hon. Minister of Agriculture make available to the Canadian Dairy Commission the funds which will enable it to meet the demands of the farmers.

In its brief, the C.F.A. mentions also that the present dairy policy contains two things that are unfair to the people concerned. The first one concerns cream shippers who get rather less than the producers of manufacturing milk. According to the brief, the second concerns discrimination against the producers of fluid milk who must sell a substantial part of their production for processing at a price established by the industry. This deprives the fluid milk producer of a badly needed revenue supplement. To this end, the federation submits the following recommendation:

We believe that more funds are needed to bring back the old federal policy whereby subsidies paid to the other dairy producers were also paid to the fluid milk producers-

In its brief, the federation urged the government to revert to the old way of paying subsidies, which was more suited to the farmer's needs.

The cheese industry is also of the utmost importance. As you know, the Lac St-Jean area alone exported last year about six million pounds of cheese to Great Britain. The managers of the cheese factories in the Lake St. John region believe that they will encounter difficulties because of the devaluation of the pound sterling. According to rumour, and in view of the devaluation of the dollar, it would not be surprising if cheese sold at about 15 cents per pound less than last year, and this will surely affect the amount paid by the cheese factories to the farmers. Therefore, the hon. Minister of Agriculture should not reduce the bonus on cheese, as he proposed or intended to do. This bonus should remain, for it is in the interest of the farmers who produce cheese.

Mr. Chairman, this leads me to talk for a few minutes about the need to increase compensation for animals slaughtered on account of contagious diseases.

A few weeks ago, I had the pleasure of introducing in the house a notice of motion urging the house to study the possibility of increasing compensation paid for cattle slaughtered under the Animal Contagious Diseases Act. I set such compensation at $200 for pure-bred cattle and at $125 for crossbred cattle.

When one knows, Mr. Chairman, that a good milch-cow, for instance, costs $500, one

must face the facts and conclude that the compensation paid a few years ago is inadequate. The C.F.U. representative would like an increase in the compensation paid, and I feel that the minister should do his utmost to meet his wishes.

It is true that the motion I introduced was referred to the standing committee on agriculture for consideration, but that is not enough. I think that the minister would give the farmers a most welcome gift if he announced shortly that he has taken the necessary action so that the compensation 1 suggested in my notice of motion will be paid.

There is another source of concern for our farmers, mainly for the fruit and vegetable growers. Every year, Mr. Chairman, greenhouse products from other countries compete with our Canadian products.

I think that the hon. Minister for Agriculture should pay a great deal more attention to the matter, than he has in the past, because when our farmers' products reach the market, it is already overloaded. It follows that our farmers are forced to lower their prices in order to sell their products. It is quite interesting for the housewives to have, earlier in the season, strawberries on their table, but to me it is only a matter of logic, and the hon. minister should protect our producers.

I know that in some quarters prevails a certain ideology under which we buy products abroad at a better price than those produced domestically. If we follow up that ideology, sooner or later we will necessarily have to assist our farmers or to direct them toward other forms of production in which they are interested.

I think that even if the consumer lacks greenhouse products for a week or a few days more, it will bring a distinct advantage to our farmers.

[DOT] (5:40 p.m.)

Shortly after taking over the portfolio of agriculture, the minister promised the farmers, if my memory serves me right, that a thorough study would be made of the various conditions concerning the purchase of farm machinery, and he also promised them relief.

Farmers are still waiting for the minister to carry out his promise in that respect and it is high time that he should assure them of his support and take positive steps to put an end to the yearly increase in the prices of farm machinery.

March 4, 1968

Finally, Mr. Chairman, I should like to tell the Minister of Agriculture that hog producers were sorry to hear that the bonus on hogs would be reduced. I trust the minister, after having given due consideration to the matter, will make strong representations to the Treasury Board, in order that the decision to reduce the bonus on hogs will be dropped. If not, Mr. Chairman, I hope the minister will realize that farmers are going to lose a great deal of money as a result of this decision and they will find themselves in a very unfavourable position to meet their obligations and production costs.

In conclusion, Mr. Chairman, I will ask the Minister of Agriculture to tell us what measures he plans to take, in order to ensure that our Canadian products will not be adversely affected by the Kennedy round of tariff negotiations.

Farmers are greatly concerned at the present time. Seeding time is fast approaching and our farmers would like to be assured that their efforts will not be in vain, in short that they have not worked for nothing.

Already the farmer has to face many unknown factors that can ruin the fruit of his labour for a whole season. He should not, in addition, face the risk that imports of foreign products will force him to reduce his operations or force him to sell his products at a price that would not enable him to meet his production costs.

This being said, Mr. Chairman, I should like to repeat my best wishes to the Minister of Agriculture and assure him that the farmers expect to receive from him the protection they are entitled to.

Mr. Cote (Nicolei-Yamaska):

Mr. Chairman, I should like during the few minutes at my disposal to discuss that famous problem of agriculture, but in a context somewhat different from that of my colleagues, that is in relation to its future, endeavouring as much as possible not to play politics. I do not wish to congratulate the Minister of Agriculture (Mr. Greene), in order to increase his political capital, but on the other hand, I do not want to criticize him and have the press report that I have done a good turn to agriculture, because I wish to speak about its future.

I heard a member opposite early this afternoon stating that the minister had a poor record up to now. I found that he was rather

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harsh until he said that when the Conservative party came into power in 1957, it had issued a challenge.

Mr. Chairman, I remember that challenge in the dairy industry. I do not want to quote figures, since, as I said earlier, this would be dabbling in politics and the hon. member would be embarrassed. I would prefer to refer to the problem of agriculture, or to make an attempt at showing it from another viewpoint different from the monetary angle.

Nowadays, I think the problem of agriculture is rather a social problem. It has reached the point where you see the young leaving our rural areas to go and live in the cities. When I was a boy, I sometimes had to walk to school barefoot, as my parents had very little resources. However I did not feel I was being persecuted, since my schoolfellows came from the same background as mine. But today, our children have to go to school in urban centres, where they mix with children from other classes of society.

As a matter of fact, when a child suddenly realizes that a school friend is better off, that he has some spending money, that a little girl can change her dress a little more often, that child suffers from an inferiority complex and finds it somewhat more difficult to concentrate on his studies. He returns home and asks his mother to buy him the same things that the others have. If he does, it is because he is intelligent; if he realizes it, it is because he is intelligent.

Quite often, the conflicts that arise in rural families are merely due to a lack of money.

It was explained earlier that the lack of money was due to a faulty administration. There is no doubt about it. It is a known fact that the state must subsidize 50 per cent of the farming community, but it is also true that the latter is responsible for that situation to the same degree. This is not surprising, because the farming community has given priests and bishops to the church, lawyers and notaries to the legal profession, politicians to public life.

So, who is left in agriculture? People who experience perhaps a little more difficulty than others in understanding problems and managing operations. In the light of all these facts, we have before us someone who has trouble managing his property; in my opinion, a successful farmer is a very intelligent man, with a variety of skills hard to find in other

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levels of society, because he must be businessman, accountant, veterinarian-without a diploma, but able to detect diseases affecting animals-and also a mechanic. With all this, he succeeds as a farmer because he is a superman of sorts. However, a farmer's problems result sometimes from bad management. That is the important point.

[DOT] (5:50 p.m.)

I wish to congratulate the minister who took the initiative of putting computers at the disposal of the farmers to enable them to administer their farms better.

Macdonald College has already begun using them. In my opinion, that will give agriculture a new impetus. It is almost impossible to be sure of selling our products because of foreign competition. Therefore, we must find a way to get a maximum production out of our farms. That is where computers will be really useful.

I was a dairy farmer at one time and only after having been able to assess the production of each head of cattle I had-it varies a great deal from one to another-I realize that this cannot be determined at a glance. We need technicians. Technique plus practice may lead to a reasonable income.

Besides the technical aspect of the problem, I would like to draw the minister's attention to a few particular points which, in fact, have been raised by other hon. members including the hon. member for Portneuf (Mr. Godin), who, I am bound to say, seemed to have some idea of what he was talking about. Listening to him, one knew that he had first hand knowledge of agricultural problems.

Then there was talk of quotas. That should be changed. Mr. Chairman, I should like to draw the attention of the minister to the question of quotas. Five dollars was the price mentioned at first. The hon. member for Saint-Hyacinthe-Bagot (Mr. Ricard) spoke of $5 a moment ago. But in the Saint-Hyacinthe-Bagot region, as in the 26 ridings in the province of Quebec which are part of a large co-operative of that province, the average price of milk will range from $4.94 to $4.96 per hundredweight. This last figure has not been announced officially, but it is very close to $5.

Now, since the Minister of Agriculture had set his objective at $4.75, one must admit that he went over it and the farmers of my constituency are quite grateful to him for that.

In addition, and if we had not lost the 25 cents premium paid by the province of Quebec, we would have $5.25. At this point, I ask those who are close to the provincial authorities not to be shy if they can help to get that premium for the areas where the price of milk does not reach $4.75 per hundredweight, because it is impossible for the federal government to establish a price throughout a province and throughout the country, considering the diversity of conditions in agriculture because of geographic location or changes in the weather. In fact, even in the province of Quebec, it is not necessary to go below Quebec city, or lower Quebec as they call it, to realize that the dairy industry is operated at an inferior level.

This is, I think, a unique problem which comes within the jurisdiction of the province. The federal government gives subsidies in order to establish an average price across Canada, but since particular factors have to be taken into account in the provinces, the decision should remain theirs, provided there is an agreement between the provinces, that they will not resort to dumping practices and then ask the federal government to settle the problem.

In our district for example and in the rural areas of the eastern townships, in the Montreal area and in the Beauce area, which covers 23 counties, we get nearly $5. However, there is a deficiency in the field of quotas.

Mr. Chairman, I should like the hon. Minister of Agriculture, to think of the farmers who gave up the market of fluid milk in favour of industrial milk, assuming they would be eligible to subsidies, because their production is a little too close to the 45 per cent standard established by the commission, to forbid farmers to change from one production to another. Therefore, those who have changed because they were not aware of the regulations are penalized. These people are not recognized as producers of processed milk entitled to subsidies. Everyone knows that if you go through a stop sign even if you claim later on it was unwittingly, you still have to pay. Consequently, I believe that those who were penalized should be granted the quota for this year. In the year 1967-1968 the farmer was obliged to sell his milk at $3.54, and if it were possible for that farmer who cannot go back to the production of fluid milk, to be recognized, then he could be subsidized.

Quotas under 50,000 pounds of milk were also mentioned by an hon. member. For the

March 4, 1968

benefit of those who do not know it, the commission has already recognized those quotas and I even think that it has been lowered to 12,000 pounds. Personally, I was not in favour of such a low quota, because a 12,000-pound production represents only the yield of two cows which produce 6,000 pounds of milk each. A farmer cannot live on such production and I am under the impression that it is even prejudicial to anyone who would like to make a living out of farming or dairying.

However, let us say that due to pressures by farm associations, the Canadian dairy commission following an agreement with the hon. minister, has recognized the merits of that request.

But I also think that we should consider raising them so that the farmer who wants to live on dairy farming gets a large enough production, because no one can live reasonably with less than 200,000 to 300,000 pounds of milk.

Mr. Chairman, may I call it six o'clock.

The Chairman:

Order. It being six o'clock I do now leave the chair.

At six o'clock the committee took recess.

Order, please. When the committee rose at six o'clock it had been considering vote 5c of supplementary estimates (c) of the Department of Agriculture.

Mr. Cote (Nicolet-Yamaska):

Mr. Chairman, before the committee adjourned, I was trying to explain to the Minister of Agriculture (Mr. Greene) that some deficiencies exist in the administration of the Canadian Dairy Commission, especially with regard to quotas.

I have not dealt specifically with the price of milk. I said that it reached almost $5 per hundredweight in some areas, but not in the country as a whole. I could have asked, like some opposition members, an increase of 25 cents per hundredweight. I would then have expressed the same wish as the minister. He would have liked to comply with that request, but even had I asked him for such an increase, it would have been to little avail. When the price of milk is raised by one cent per hundredweight, it costs $1 mil-

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lion to the country. If a further increase of 25 cents is requested, then the Minister of Agriculture would have to ask the Minister of Finance (Mr. Sharp) for $25 million more.

Every time that members of the opposition or of third parties ask for higher milk prices, the Minister of Finance must set up a new fiscal policy to get the money. He would then be defeated by the opposition, and that is why it is useless to ask for it. I would rather stick to the present quotas.

I would like to see all those who have abandoned fluid milk production for industrial milk production be recognized by the Canadian Dairy Commission as industrial milk producers in order to benefit from a quota for 1968-69.

Another problem which I want to bring to the attention of the minister and which involves many people is that of the milk producers who sell a few quarts of fluid milk in villages or rural areas. Because they sell 2, 3, 4 or 5 per cent of their production, or 5 to 10 quarts of fluid milk, these farmers are recognized as fluid milk producers and are ineligible for subsidies paid by the dairy commission.

These same farmers are forced to stop delivering milk to the villagers and to go exclusively into the production of industrial milk; even then they are not recognized. As for the villagers, they are forced to buy their milk from city distributors at twice the price they would pay at home. I should like to bring one of these cases to the attention of the minister. In my riding, several farmers have stopped selling a few pints of milk in order to be recognized by the Canadian Dairy Commission, and they have not even been recognized. If possible, I should ask that subsidies be granted to these people in 196869. We should also think of young farmers with financial obligations and whose quotas do not amount to 300,000 lbs. of milk. These younger people should be afforded the opportunity to have their quotas readjusted according to their production for the year 1967-68.

An 18-year old youth who is almost a salaried worker or who does not receive a salary from his father tries to invest, to get a piece of land which he will be able to work one, two or three years later.

But the father is not recognized as having two employees officially and he cannot get a quota exceeding 300,000 pounds of milk. I would like those farmers to receive subsidies and to be recognized by the Canadian Dairy Commission.

been reduced. There is another problem that we must try to examine properly. I know that in my riding and in that of Saint-Hy-acinthe-Bagot-if I often talk about the latter, it is because it is next to my own, where we find the same type of farming and the same problems-but perhaps the hon. member for Saint-Hyacinthe-Bagot is not aware of the conditions of the pork industry-you find pork breeders. Some people go in for integration. Farmers are told: you must produce, you will be provided with piglets and financing and then, you will get $3 per hog. All you have to do is sign the invoice, the cheque, and give them to us. In that case, I feel that the money is taken from the Department of Agriculture but is not handed over to the farmers.

I do not want that subsidy to be discontinued. I would not want anybody to say that the hon. member for Nicolet-Yamaska is against subsidies for farmers. But I want those subsidies to be paid so as to benefit the farmers. Such is the change that I am asking for. Let us say that the subsidy is being discontinued temporarily because of restrictions. The Minister of Agriculture will certainly have to make further restrictions if the opposition refuses to vote the necessary estimates. But if we are to eliminate the farmer's problems all members of the house will have to agree to increased taxes, even if that is bad politically. If we are aware of the problems of that class of society, we must assume our responsibilities, face the electorate and explain that the money we put in the pockets of some members of society must come from society as a whole. It is as plain as that.

Mr. Chairman, I see my time is running out and I would ask a few minutes more.

It must be understood that when we ask for assistance for our farmers-I am speaking to all those who are not familiar with agriculture and who do not live in a farming area -farmers are not pocketing the money or hoarding it in their cellars. However, every dollar invested benefits the whole industrial and commercial sector. Agriculture represents 35 to 40 per cent of the national economy. This includes not only the sale of agricultural products, but everything that has to do with agriculture. Money invested in agriculture is not only invested in farming but in the whole community which is dependent upon agriculture.

I toured the Gaspe and Timiskaming regions and I saw places where there is nothing but rocks for 20 or 25 miles, small villages whose 27053-457

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inhabitants depend wholly upon the tourist trade or on fishing for their living. However, if you cross a plain of about 10 or 15 square miles, you see farmlands, a pretty village and all sorts of enterprises which settled there because they depend on agriculture.

Every time the farmer is subsidized, he buys something to improve his operations. We should not get the idea that those subsidies are simply going into the pockets of the farmers.

In order to prove my point, I am going to quote some figures which will show that any investment in agriculture is beneficial to many.

For instance, in 1965, dairy producers shipped products valued at $909,172,000, that is $145,186,000 more than in 1961. Now, that increase of more than $145,000,000 went to organizations related to agriculture. The dairy industry employed 31,866 persons whose salaries amounted to $137,681,000. The cost of supplies and raw material amounted to $721,735,000. The cost of containers and packing material amounted to $47,798,000. The cost of fuel and electricity should also be added. That impetus given to the dairy industry permitted the purchase of supplies in other fields.

I see that my time has expired, and to give an opportunity to others of my colleagues to state their views, I shall resume my seat and ask all who are present here to realize that when the Minister of Agriculture makes special requests to the Minister of Finance, those concern other sectors of the economy.

Mr. Stanfield:

I think we can all agree, Mr. Chairman, that there are many serious problems facing Canadian agriculture and I say at the outset that in the time I intend to take tonight I do not propose to solve all of them. After all, the minister himself has not succeeded in doing so during all the time he has been Minister of Agriculture, so I shall not attempt to do so in half an hour tonight. Nevertheless, there are some views that I wish to express.

I think the problems involved in agriculture are revealed by statistics with which we are all familiar in connection with rural poverty and farm income in relation to other sections of the economy. The extent of the difficulties is revealed also by the obvious dissatisfaction of Canadian farmers to which my hon. friend from Kent (Ont.), referred on Friday. After all, Mr. Chairman, a couple

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of years ago 60 per cent of the farmers of Canada were sufficiently unhappy about the approach of this government to agricultural problems that they cast their votes against the government, and I think the proportion would be much higher today. However, I suggest there are several misconceptions widely held about Canadian agriculture and I think they are reflected, to some extent at least, in the approach of the government.

[DOT] (8:20 p.m.)

I think it is worth emphasizing that agriculture is not an isolated industry unrelated to anything else. We say this all the time, but I think it is worth emphasizing the significance of it. Agriculture is of course directly affected by general government policies, and not only by the policies of the Department of Agriculture. I think this is an important point to keep in mind. Equally important of course is that agriculture itself directly affects the economic health and progress of the country. We cannot think of agriculture in isolation. We cannot deal with agriculture intelligently isolated from the rest of the economy. There will not be a healthy Canadian economy unless there is a healthy agriculture-

Hear, hear.

Mr. Stanfield:

-and there will not be a healthy agriculture unless there is a healthy Canadian economy.

Today the farmer is caught in a cost-price squeeze. His international markets are threatened by the apparent reluctance of the government to pursue these markets vigorously. His domestic markets are threatened by import policies which certainly many farmers and farm groups find incomprehensible, and there is a particular difficulty in securing credit except to the extent that it is supplied directly by government agencies. Farmers are caught up in the general uncertainty as to the Canadian economy and government economic policies.

Agriculture of course is an industry in which the federal government is very heavily involved, as well as provincial governments. On many commodities government policy controls quotas. Government policy controls transportation and transportation charges. Government policy to a very considerable extent controls marketing, the rate of stabilization payments, the decision as to whether stabilization payments are to be made, and to a very large degree the availability of credit.

Consequently to a very large extent the fate of the farmer is in the hands of the government.

The government is certainly deeply involved, certainly it cannot withdraw. I seem to discern-and I hope this is not justified-but I have an impression that the minister and the department tend to some extent to wash their hands of the problem involved as being too difficult, and something that will have to be worked out by the process of attrition. But I suggest the government has an obligation to develop effective long range policies.

No one can deny the difficulty of the problem. Certainly I do not. Our agriculture problem on the one hand is related to persistent world poverty and on the other hand to rapid technological change, which confronts our farmers with constantly changing conditions of production and competition. Agriculture is certainly resistant to any blanket policy because of the different types of farming in our country, because of the regional differences, because of the great variety of crops that can be and are grown in Canada. But surely the difficulty of the problem is not an excuse for ineffective policy, nor is it satisfactory simply to phase out the industry or allow it to work out its destiny through a process of attrition.

Our agriculture must be viable. The world, as well as our country, needs and will continue to need food. The former Conservative government, which had confidence in Canadian agriculture-

Hear, hear.

Mr. Stanfield:

-introduced some very

important initiatives in the fields of credit marketing, the ARDA program, and indeed other programs. The policies of that period created a momentum and an optimism in agriculture, a feeling which has definitely been allowed to lapse. Many of the present policies relating to this industry of agriculture are either ineffective or else cause more problems than they solve. I think perhaps it is an even more serious criticism that the basic approach of the government to agricultural policy has very serious faults in itself.

I have already emphasized in a general way the importance of the government's general economic policy, or lack of it, to agriculture. We have made our point before about mismanagement of the economy and the general lack of confidence in the economic policy

March 4, 1968

of this government. There is no need for me to review this now, except to say that the economic mismanagement of the government affects the business of agriculture at least as effectively as it affects any other business.

There are particularly serious consequences for agriculture in inflation. I would simply remind the minister of the increase in farm costs that has taken place during the last two or three years. In 1960 through to the end of 1963 there was an annual increase in farm costs, but it was relatively moderate. The increase for 1964 in farm costs in Canada was 10 percentage points; in 1965 it was reported to be 13 percentage points, and in 1966 it was 22 percentage points.

Shame.

Mr. Stanfield:

That is, I should say, 22 percentage points over 1963. This shows a steadily increasing rate in farm costs.

I think inflation is the largest single factor contributing to the cost-price squeeze in which the farmer finds himself. Inflation increases the prices which the farmer must pay for his means of production and for the other commodities he buys, and of course it eats away at the effective returns he receives, because it reduces the buying power of his dollar. Inflation holds a special threat to the agricultural community because unfortunately many farmers already live near the subsistence level, and few farmers are able to pass the burden on to others.

Many of our farmers are competing in international markets in which prices do not reflect inflationary pressures in Canada, but certainly our farmers' costs of production reflect inflationary pressures. Many of our farmers who do not sell in international markets, who sell only in our domestic markets, are competing also with outside producers who are not subject to the same inflationary pressures. The abject failure of this government to control inflation is, I suggest, costing the farmers of this country dearly indeed.

Closely related to inflation is the high, increasing rate of interest which farmers have to pay for credit in Canada today. The investment required to operate an efficient and competitive farm increases each year. Inflation aggravates very substantially the farmer's investment problem by adding to the cost of buildings and of equipment that he must buy. But the cost of farm credit today, except where it is available through provincial and federal agencies, makes it increasingly difficult for a farmer to maintain efficiency 27053-457J

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and make a profit; and certainly he cannot make a profit if he is not efficient, Mr. Chairman.

I think credit is particularly difficult to obtain at today's rates. Raising the bank rate almost dried up the source of credit for farm improvement loans which involved a statutory ceiling of 5 per cent, because naturally banks are reluctant to lend at those rates when there are more attractive rates available.

[DOT] (8:30 p.m.)

I think the cash squeeze on some of our farmers is particularly acute, especially in western Canada where the sales of grain have been disappointing. Consequently the farmers are facing an acute shortage of cash. Then in addition we must remember that the general rate of return on farm investment is substantially lower than in most other sectors of the economy. Consequently the attractiveness of farm investment is particularly affected in an adverse way by any substantial increase in the cost of credit to the farmer. This is one more example of how the actions of this government today frustrate the operations of programs which have been passed by parliament, and which are known to be necessary for healthy agricultural growth.

I recognize that part of the pressure on interest rates is international in origin, but we know all too well in this country that the recent increase in the bank rate is due to protective measures which were felt to be necessary in order to take care of conditions within Canada. I suggest that the scarcity of credit and the high cost of credit to the farmer is a clear indication of the disastrous consequence to the farmer of the general absence of economic policies on the part of this government. In addition, the question of confidence affects the farmers as it affects other people in business. Agriculture is now big business which requires, as I indicated, a very large capital investment. Anyone making a large capital investment requires the type of certainty which makes long term planning possible. Even if a farmer should be able somehow to arrange his financing today, naturally he is reluctant to make large commitments perhaps at high rates of interest and certainly under conditions of anything but a secure return.

Naturally under these conditions farmers are jittery in terms of investment, and unwilling to make long term commitments while economic prospects remain uncertain.

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This economic uncertainty in agriculture is complicated by the further uncertainty resulting from inconsistent and unco-ordinated government federal policies. I have referred to the effect of the raising of the bank rate, and the effect this naturaly has on farm credit. The hon. member for Kent (Ont.), referred on Friday to the inconsistency involved in emphasizing retraining on the one hand and on the other hand cutting back on the federal involvement in vocational schools where training must take place. Several speakers have pointed out the inconsistency between a federal policy which subsidizes Canadian production on the one hand and allows import competition on the other. Clearly the present government seems to lack an over-all policy with regard to agriculture because I think if one existed the inconsistencies could be avoided.

As a whole I believe this clearly indicates that the government gives rather low priority to the farmer and to agricultural problems because, as well as the inconsistencies within the federal government, serious conflicts can arise between governments and perhaps it is time to consider more effective measures for co-ordination between governments at different levels. I suppose it is clear that problems of provincial jurisdiction are involved to some extent, but I think these can be overcome by a federal government which is prepared to perform its obligation of leadership and adopt a co-operative and reasonable attitude.

I should point out that in addition the government has made several bad decisions for which Canadian farmers have had to pay the price. These are not necessarily decisions of either the Department of Agriculture or the Minister of Agriculture, but they are decisions which definitely affect the farmer in a very real way. As has been stated many times in this house, a government blunder left Canadian farmers without a world wheat agreement, and therefore unprotected, for a period of some 11 months.

Hear, hear.

Mr. Stanfield:

Now I understand that as a result of this there has been some price undercutting. The hon. member for Qu'Appelle has pointed out previously that the United States would never have become involved in this type of thing-price competition with Canada -had this Liberal government not dropped its gentleman's agreement relating to price

stabilization, an agreement which had been developed by the former prime minister, Mr. Diefenbaker, and President Eisenhower, and confirmed I believe as recently as April, 1963 by the late President Kennedy.

That agreement, which had been sustained through informal quarterly meetings between the Canadian and United States officials, apparently was abandoned by the Minister of Finance and the Minister of Trade and Commerce. The Canadian farmers bear the burden of this decision on the part of the government, because it is the farmers who directly bear the burden of the lack of stability in prices.

Government policy clearly has complicated the problems of the dairy industry. The blame for this I believe lies at the door of the Department of Agriculture, because I think in three years we have had three different national dairy policies. That type of action defeats planning and destroys confidence.

Now there would seem to be the danger, because of its indecision and lack of leadership, that the government may allow the difficult situation at the Montreal docks to continue. This is a condition which obstructs the movement of grain and one which is particularly unfortunate now, when the farmers have already suffered through an autumn when deliveries were difficult. The government recently has been questioned about this matter and is held responsible by this house. It is important that action be taken to ensure that shipments of grain are not further disrupted by troubles at the docks in Montreal.

It is not just the policies of the Department of Agriculture which affect the farmers; it is the policies and activities of the government in totality. Perhaps the most serious aspect of the policy of the government, such as it is, is that it seems to be based on a rather sweeping premise that the number of farms should be reduced and an emphasis placed on larger units. Certainly some farmers must be helped to move and many others must be encouraged to diversify. I suggest, however, that it is wrong to base an agricultural policy on the sweeping view that we must everywhere cut back on the number of farms and increase the size of the unit, because I believe there is some evidence that the future of Canadian agriculture in some respects lies in more intensive farming, increased productivity per unit and not necessarily in larger units. That seems to be the conclusion of the Kemptville study, which drew evidence from all over

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Ontario, and of the study conducted in one of the larger grain producing areas of Alberta.

There is evidence that in the next decade the best use of land will require more farms than at present, not fewer, and that land which is not now in use will be brought into production. This of course was one of the basic purposes of the ARDA project, which we believe should not be forgotten when considering the agricultural policies of this country. Those policies, I suggest, ought not to be based on sweeping premises which are not valid everywhere. I believe there is good reason to anticipate in the future an expanding market for an expanded Canadian agriculture based on the continuing growing demand in the world for food. This does not solve our immediate problem, of course, but it does give us grounds for confidence in the future.

[DOT] (8:40 p.m.)

It is known that the world is entering a period in which the spectre of famine again threatens the progress of less developed countries. The coming decades will apparently be years of crisis so far as famine is concerned. I think there is a real challenge for Canada to co-operate with other developed countries in international programs which provide immediate food relief, by building up a long range agricultural capacity for selected recipient countries. That may mean changing from the attitude whereby we should produce for the nearby city or domestic markets only. Certainly this will require research for the development of new techniques of processing and marketing to allow an increased flow of all Canadian farm commodities to foreign markets.

I should like to say a few words about ARDA, because I believe this program is of central importance to Canadian agriculture, perhaps particularly in the Atlantic provinces and Quebec. It is important not only to those provinces but to all areas of Canada where farm income and productivity has been inordinately low. Under the present government I think ARDA has not realized its full potential. It has placed emphasis on studies which, of course, are necessary, but this has not been sufficiently matched by an emphasis on action. We continue to believe that ARDA could be one of the most effective instruments of social and economic policy ever devised in Canada, but it must be used if it is going to achieve this purpose.

Let me emphasize again that agricultural policy must be based on a sound and growing

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economy. The government must attach a high priority to agriculture, taking the long range view and recognizing that as an industry with several problems, it is also an industry with expanding opportunities. The government has not shown much confidence in the future of agriculture, and agriculture itself must have confidence in the government.

This industry like all others must of course adapt to change, and the government must assist the process of change, not resist it. Farmers must be efficient to survive profitably; but how can a farmer become efficient and maintain efficiency under the general economic policies of this government as applied in this country today, where credit is as scarce as the proverbial hen's teeth, and when the cost of production is so high in relation to anticipated earnings? Most farmers today have little incentive to mortgage not only their farms, but their lives, because of the little hope and expectation and little return.

The particular point I want to make is that it is not enough to improve efficiency because improvement in efficiency can be taken for granted. I suggest that the government and the minister, so far as agriculture is concerned, have been caught in a vicious circle. Certainly to be profitable a farm must be efficient, but because of rising costs fewer efficient farms are profitable. I suggest this government is eliminating incentives to be efficient by permitting inflation to continue and allowing the farmer to be confronted by high cost credit, making it virtually impossible for a farmer to feel any confidence in planning his investment.

So, as I say, it is all very well to talk about efficiency, but the total effect of government policy is to eliminate the incentive for farmers to be efficient today. I suggest this is a very serious state of affairs. There are very many problems in agriculture today. Before much progress is to be made with these problems this government, or some other, must once again provide some incentive for the farmer to be efficient, and make it possible for the farmer to plan wisely and to look ahead with some confidence of gaining a reasonable return on the increasing investment he has to make.

Thank you very much.