October 3, 1968

LIB

Horace Andrew (Bud) Olson (Minister of Agriculture)

Liberal

Mr. Olson:

Mr. Chairman, much more than that, I can say that for the past week or more officials in my office have been as helpful as they could possibly be in making arrangements in Ottawa for the tractors of these farmers and for all other facilities that will be needed to have a meeting here on parliament hill. We also have a room at the Department of Agriculture that will hold 200 or 300 people and we could meet there, if weather does not permit a meeting outdoors.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
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PC

George Harris Hees (Progressive Conservative Party Caucus Chair)

Progressive Conservative

Mr. Hees:

Are you going to be there?

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
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LIB

Horace Andrew (Bud) Olson (Minister of Agriculture)

Liberal

Mr. Olson:

Certainly I am going to meet with them. We are doing everything we can to be as helpful as we can.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
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PC

Donald Frank Mazankowski

Progressive Conservative

Mr. Mazankowski:

Could I ask another question of the minister?

The Depuly Chairman: Is it on the same subject?

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
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PC

Donald Frank Mazankowski

Progressive Conservative

Mr. Mazankowski:

Yes.

The Depuly Chairman: I have recognized the hon. member for Timiskaming.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
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NDP

William Arnold Peters

New Democratic Party

Mr. Peters:

Mr. Chairman, I have been very surprised at some of the things that have taken place this afternoon. While I do not believe in reincarnation, certainly the Minister of Agriculture has been showing

Ociober 3, 1968

some of the shades of Jimmy Gardiner and some of the characteristics of C. D. Howe in his disregard for parliament. During the discussion of this resolution concerning farm credit the minister has stated that the farmers need this piece of legislation in a hurry. However, he knows full well that the Farm Credit Act ran out in June of this year. He knows, too, that there has been very little money lent for a period of eight or nine years because of the reluctance on the part of the banks. The minister says we should have passed this legislation in February. This is probably the kind of legislation the house would have passed in February, and it is damn well the legislation that this house expected to pass in April when parliament sat for one day. I do not believe, therefore, that the minister should look at the opposition with a jaundiced eye but rather that we should perhaps look at the minister with a jaundiced eye.

I am surprised at the minister because he knows the rules as well as anyone in this house. There are three or four high priests of the rules, and he is one of them. If anyone knows how the rules should operate, he should. He is one of the self-appointed high priests. I believe that the matter of corn prices warranted an examination by the minister today. In my opinion this debate is not remote from the price of corn in Essex county, but it certainly is remote from the price of corn in Timiskaming because none is grown there. Climatically Timiskaming is not in the right area. However, in Timiskaming there is another problem which makes it absolutely necessary that farmers receive credit at a reasonable rate of interest. That rate is probably in keeping with the rate suggested by the hon. member for Temis-camingue.

[DOT] (4:10 p.m.)

The hon. member for Mackenzie indicated how generous we have been with interest rates charged to other countries. Apparently we have lent money at a very low rate of interest. There are shades of C. D. Howe, and certainly some conservatism with a small "c", in the legislation before us now, which does not seek to establish an interest rate for a particular industry but follows current levels. This means that the business community is controlling most of the expenditures of the government.

The Postmaster General made a statement this afternoon in which he said that his department must pay its own way. There are

Farm Improvement Loans Act those who believe that even from the days of Wells Fargo it has never been necessary for the post office to pay its own way in that it has served to unite the people of the nation by supplying them with certain facilities which were not available to the individual. The same may be said of the Farm Credit Corporation.

We should not be interested in the interest rates charged by banks. If a farmer has enough collateral he can borrow money from a bank at the current interest rate, whatever it may be. It is not necessarily 1 per cent higher than that charged on government loans or student loans.

I suggest that in view of what happened in Regina last night the image of this government will become quickly tarnished. I am not one to participate very much in the question period, but I was surprised that nobody asked about the revolution of students in Peru and their participation in the military coup there. I am also surprised that nobody asked about what may become a serious problem for the Olympic games because of the student riots in Mexico City. The government must recognize that we need money to develop our natural resources, whether these resources be in the form of student education or agriculture.

I suggest, that we should not try to make money on loans to farmers. As in other pieces of legislation that deal with farmers, we should try to establish some advantage that will accrue, not necessarily to the farmers individually but to the industry generally.

We have made some serious mistakes. I am not sure whether it was the government's mistake that the stabilization board did not anticipate the present corn problem, but we certainly did not anticipate any difficulty when we developed the national dairy commission and established industrial milk prices. However, through our action we changed the small one-can farmers into producers of industrial milk who no longer separated cream on the farm. These farmers had to borrow large sums of money from the Farm Credit Corporation to buy a bulk tank, which in Timiskaming costs between $12,000 and $14,000.

As a result of this policy which was formulated in Ottawa, our farm separated cream industry, which was the backbone of small farming operations in Canada, was transformed into a bulk producer of industrial milk. We have also changed the operations of almost 90 per cent of the farmers in western Canada who carry on mixed farming. We

October 3, 1968

Farm Improvement Loans Act have asked them to borrow money under the Farm Improvement Loans Act, under other farm legislation and even under ARDA in order to establish themselves as economic units. I suggest that when we become involved in matters such as this we should be guided by some principle. This principle must surely be the provision of sufficient credit to develop our industries and in turn our national economy. Thus the role of credit is very important.

Personally, I do not give a damn if we lose $5 million or even $10 million through farm improvement loans provided they are a subsidy to industrial development. I believe many more people would be more receptive to subsidizing the development of a stable and progressive industry than to subsidizing other operations which turn out to be calamities. I do not know how much the cheese subsidy amounts to or the subsidy on powdered milk, but there is a surplus in this area of 200 million or 300 million pounds.

The farmers in Ontario have been forced by the government into bulk tank operations. The government told the farmers that they would not buy milk from them unless it was in bulk tanks. The Ontario milk marketing board decided that milk should be in bulk tanks. Any milk in cans is probably not under the operations of the milk marketing board of Ontario. This kind of control having been exercised, these farmers have had to borrow in order to expand their operations.

We are the people who indicated to the Ontario farmers that no longer was a family farm to consist of 160 acres. I suppose in western Canada a family farm unit would be a full section. We are the people who have declared that a multiplicity of units must be brought together to make one economic farm unit.

We have also suggested that farmers should buy farm machinery, and so farms are becoming automated in the same way as other industries. This costs money. As a result farmers have to borrow money, and in my opinion they should be able to borrow it at a rate they can afford. I suggest we are misleading our farmers when, on the one hand, we advise them to buy a new tractor or other pieces of farm machinery and, on the other hand, allow the banks and lending institutions of this country to raise their interest rates to a level that puts loans to farmers out of their reach.

The minister is in the agricultural industry himself; I understand he is a rancher. This is

one segment of the industry that has had a certain stability during the last few years, though I believe those engaged in this occupation say it is not as stable as it should be. Nevertheless beef prices in Canada have become fairly stable over the last eight or ten years, and the result has been a fairly stable industry. However, one sector of the agricultural industry is in serious difficulty, our corn producers.

[DOT] (4:20 p.m.)

The other day a very good friend of my father's came to my office. He and my father for some time had shared responsibilities on the old Ontario milk marketing board. This chap was in the dairy business a few years ago but over the years he became discouraged with the dairy business and moved into the production of corn. In this project he was given assistance in the form of a large loan made through a government agency. Now he finds that it costs him $1.20 to produce a bushel of corn. At noon today I noted that corn was listed on the market at something less than $1 per bushel.

I know the minister is not a financier but I ask him, what hope is there for the survival of agricultural producers when their produce sells for less than its cost of production? Even if my figures should be out by ten cents either way, the farmer still stands to lose substantially. Yet in spite of these conditions the federal Department of Agriculture is making the stupid recommendation to allow the chartered banks to set interest rates on farm improvement loans.

Those in agriculture in this country are not stupid, and that is why they are coming to Ottawa. The minister is a farmer and no doubt he has a tractor. He knows tractors are slow; they are difficult to handle on the highway and are boring to drive long distances. The minister must know that tractors are en route to Ottawa. Police are escorting them at a set speed of 15 miles per hour. The minister will agree with me that if he were a farmer he would only mount his tractor and drive it to Calgary or Edmonton if he had a very compelling reason for so doing.

The minister says that this resolution is not about corn, and I agree. This resolution is about money, and if it passes the farmers will have to pay more for the money they borrow. I submit that parliament should not permit an increase in the cost of money to the farmer while at the same time permitting a decrease in the price of farm products.

October 3, 1968 COMMONS

Always, even in my C.C.F. days, I have supported the concept of parity prices for farm products. A parity price would mean that the farmer would have his production cost and would be allowed an additional wage for the work he did. When he sold his produce on the market, he would be entitled to a return equal to his outlay. Sometimes he might even be lucky enough to make a small profit on his investment. But the important consideration is the parity price.

What is the present situation? The farmer is faced with rising production costs and falling market prices. Yet the government is bringing in legislation that will increase the price of money that farmers borrow. I submit the government should look again at the concept of parity prices.

If the government is unwilling to consider parity prices I submit it ought to consider subsidizing farm production. I do not apologize for mentioning this concept, since without a subsidy our farmers will suffer losses. They cannot enter the open market and borrow money at 5 per cent. Consequently they will suffer losses, and that is where a government subsidy comes in. I believe the government could, with great advantage, make subsidies to agriculture available in the field of farm improvement loans.

No farmer with a team of horses, 160 acres, a walking plow, seed drill and all his other equipment can possibly make a living today. He might have done so five or six years ago but he cannot do so now. Often I attend the markets in my area and very often you will see from 400 to 500 day old to week old calves on the market. This indicates that these calves are not being raised on the farm and that farmers in the area are engaging in the production of milk, either industrial or fluid. All those in agriculture need short term credit and I think the greatest service this government can do agriculture is to stabilize at reasonable rates the cost of such credit.

No doubt hon. members will remember the millionaire farmer who for a while ran the Department of Agriculture. We heard complaints to the effect that the Liberal government was in such terrible political straits that it was necessary to appoint an agricultural minister who came from the east. Personally I thought the appointment was a good one. The government ought to continue appointing such men to such posts. I remember the days of Jimmy Gardiner and the 40 years in the wilderness for eastern farmers. I remember the days of the former minister from the west

DEBATES 751

Farm Improvement Loans Act who is now a senator. I also remember the days of farm syndicates when some could afford pieces of machinery worth $75,000 and when the federal government enacted legislation for 364-odd people in the very rich class. My point is that those people cannot be considered the backbone of agriculture in Canada. Those who today form the backbone of agriculture need money to operate their farms, to expand and to make changes.

We in parliament over the past five or six years have devised tools to help the agricultural community. In my area I have found a form of assistance other than farm improvement loans in current use. The ARDA people are buying land. The ARDA people will buy the farm across the road and rent it to a youthful farmer.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
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LIB

Albert Béchard (Deputy Chair of Committees of the Whole)

Liberal

The Deputy Chairman:

Order, please. I must inform the hon. member that his time has expired.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
Permalink
?

Some hon. Members:

Continue.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
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LIB

Albert Béchard (Deputy Chair of Committees of the Whole)

Liberal

The Deputy Chairman:

Does the committee

agree?

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
Permalink
?

Some hon. Members:

Agreed.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
Permalink
NDP

William Arnold Peters

New Democratic Party

Mr. Peters:

I thank the committee and I shall not abuse the privilege it has extended. I was saying that ARDA buys land. Under the ARDA legislation farms much larger than is realized are being assembled and then rented. As I said, the ARDA people buy the farm across the road and the one down the road and they may rent them to a young farmer under certain conditions. Over a period of three years he will be able to collect a large block of land in respect of which only a nominal payment is required. At the end of the period, three years or five years, he will be given the option of releasing it or of making payments to ARDA.

[DOT] (4:30 p.m.)

My point is that we have a responsibility in the field of credit to ourselves, to the agricultural sector and to the whole of Canada, and that if we are not completely opposed to subsidies we should admit that one of the most equitable ways of subsidizing agriculture in this country is through the provision of low-cost loans to farmers. I would therefore appeal to the minister to reconsider these resolutions. His party did not go to the nation as supporters of a completely free enterprise economy. They put forward the idea of a just society. As I see it, among other things this means refusing to burden agriculture with

752 COMMONS

Farm Improvement Loans Act interest rates which will make the banks rich while causing hardship to the agricultural workers of Canada.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
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RA

Joseph Adrien Henri Lambert

Ralliement Créditiste

Mr. Lambert (Bellechasse):

Mr. Chairman, we are discussing the farm problem which is extremely serious, because farming is a basic industry, not only in Quebec but also in the whole country.

I have listened with a great deal of attention to the remarks of the hon. members from other parts of our country, and I have come to the conclusion that the farm problem exists all across Canada. I cannot understand that, in the case of an industry as important as agriculture, ways cannot be found to solve a problem which is of concern not only to the farmers but also to the whole people.

The farmer's returns are inadequate as compared to the number of hours he has to devote to his work during the production cycle and as compared to his invested capital. That is why he often has to resort to borrowing in an effort to improve his production capacity. The government probably thought that by making his credit facilities easier at reasonable interest rates, he would be able to improve his position and to stabilize his enterprise.

Various problems prevent the farmer from developing his operation, putting it on an economic basic in all respects and getting from it a stable income. The main problem is that of prices because the farmer never knows what to expect in that sector.

The farmer never knows beforehand, except for a few products, what price he will get when he puts his production on the market. That is what happened last year to hog producers, for instance, and to egg producers who had to put their products on the market at a price lower than the production cost. That was not the way to increase their income, allow them to become financially independent and survive in a normal way.

What would happen to a manufacturer, for instance, if at the other end of the production line in his plant the price offered for his product was lower than his production cost? He certainly could not stay in business very long, he would go bankrupt. That is the situation in which agriculture finds itself in our country. It is likely that no one wants to call it bankruptcy but everyone is complaining that agriculture is in a very precarious situation.

DEBATES October 3, 1968

Among the obstacles which also prevent the farmer from getting a foothold, from surviving in a normal and advantageous way, there is the weather over which no one has any control.

The farmer is faced with those difficulties. He sometimes suffers heavy losses due to excessive rain, drought or insects which destroy the seeds and prevent him from getting something for his work. I know that neither the government nor the farmer can do something in that field. However, it seems to me that such drawbacks are quite enough, without us having to bear on top of that the ups and downs of an unstable market as far as prices are concerned.

I wonder whether a generous increase in the farmers' borrowing opportunities would settle their problem or whether it would be to the sole advantage of lenders who expect a higher rate of interest. Would this rise in the rate of interest be profitable to the farmer, or rather to financing institutions making the loans?

Another factor which prevents the farmer from bearing the expenses which a normal development of his business entails, is the cost of farming machinery. The problem by far exceeds the limits of a given milieu. Farm equipment sells at a very high price and the manufacturers do not always take into account the eastern or the western agriculture, in their manufacturing.

Some spare parts are sold at an excessively high price, absorbing a large part of the farmers' income because, very often the spare parts cannot be readily adapted to the various kinds of equipment bought in Canada.

[DOT] (4:40 p.m.)

In order to lower the production cost of farm machinery, it might be a good idea to encourage the setting up of strong Canadian industries in Canada that could manufacture equipment suitable to our needs, as well as spare parts which could be used as equipment of different trademarks without too much inconvenience.

Mr. Chairman, I may be drifting away from the subject but I shall come back to it. I am not too keen about this measure, because it does not really meet the needs of agriculture in eastern Canada. The agricultural economy of Quebec has always been centered on the dairy industry. An increase in the size of farms and of dairy herds is offered as a solution. I am convinced of one thing: in the province of Quebec the dairy industry has.

October 3, 1968

been, remains and will remain for a long time, the basic industry in our agriculture.

However, the increasing number of milk cows, each year, in Quebec and the decreasing number in Ontario shows that the dairy livestock is also decreasing in the other provinces. This gives Quebec the first place in Canada as far as the dairy industry is concerned.

We have 38 per cent of the whole dairy livestock, and milk production of Quebec represents 35 per cent of our Canadian production.

In 1966, Quebec farms produced 6,500 million pounds of milk bringing $224 million to the producers. That is not enough to remedy the situation, and it would be necessary to increase prices in order to raise the revenue of dairy producers.

Price support should be increased on a continuing basis, always taking into account prices, costs and production.

Consumers, hearing a farmer talk about the increase in price support, will perhaps think, and quite rightly, that if the government complies with our request, consumer prices may go up.

However, the Creditistes submitted during the election campaign a proposal which would allow the government to satisfy both the producers and the consumers by using the Bank of Canada to advance the necessary credit to the Canadian Dairy Commission. This commission would then grant the necessary subsidies to the dairy producers, which would allow them to get a reasonable price for their products and have a decent income which would make it possible for them to expand their operations as much as reasonably possible.

Mr. Chairman, I am in favour of the enlargement of farms. We have been practising it in our area for a certain number of years. We are also in favour of increased herds of milch-cows, in order to have profitable family businesses which can survive. Then, our sons will be truly interested in the survival of our agriculture for the advantage of the Canadian community and the French-Canadian community.

But by experience, Mr. Chairman, I know that a given moment, one cannot go over a certain limit, because if the size of the farm is unduly extended, we will have to resort to outside labour and this would be quite costly. It would contribute also to increasing the cost of production and, finally, it would reduce

Farm Improvement Loans Act the net income, so that the situation would not be improved.

There is also some uncertainty with regard to the policies of the federal and the provincial governments. The federal government has a word to say in the field of agriculture, through its legislation on the international market, etc., and the provinces also have some responsibilities. But it often happens that when a farmer goes to the government, either federal or provincial, to ask for help, he gets the following answer: "Go to the provincial government, this does not concern us," or "Go to the federal government, this does not concern us." And so they pass the buck, while the farmer waits, suffers and, in the meantime, the situation grows worse. That is why the agricultural situation will continue to deteriorate, unless an agreement is reached and the responsibilities of the federal and the provincial governments in the field of agriculture are clearly defined.

Incidentally, allow me to make a suggestion: there is a lot of talk about a new constitution, etc.; but where agriculture is concerned, when a new constitution is drafted, I should like the situation to be taken into account, and an attempt made to correct it, by defining exactly what responsibilities belong to the federal government and to the provinces in the field of agriculture, so that one might know where to look in our society.

Mr. Chairman, before bringing my remarks to a close, allow me to draw the attention of the house to the resolution before us. There is a huge question mark in my mind. On page 14 of the annual report of the Farm Credit Corporation, one can read the following: FINANCING Farm Credit Act

To finance its lending program during 1967-68, the Corporation borrowed $194.5 million from the Minister of Finance at an average interest rate of 6.16 per cent-

Further on, the result of the difference between the interest rate paid by borrowers and that paid to those who financed the government is given.

Approximately 80 per cent of the funds lent by the Corporation bear the statutory interest rate of 5 per cent. The Corporation borrows funds from the Minister of Finance at current interest rates which are much higher than the average rate the Corporation may charge, thus creating an interest deficit which lasts for the duration of the loan. A continuation of the excess of interest cost rates over interest revenue rates will result in cumulative and rapidly accelerated annual operating losses.

Mr. Chairman, I should like the minister to tell us, while this question is under study,

October 3, 1968

Farm Improvement Loans Act whether there is really a relation between the report of the Farm Credit Corporation and the bill which would allow the cabinet to increase the interest rates on loans granted to farmers.

Mr. Chairman, in a general economic development program we have to take agriculture into account. Agricultural policy must be a part of a general economic policy. The conventional distinction between agriculture and industry tends to conceal or at least to deny the fact that agriculture is itself an industry which, in addition, generates more industrial activity, wealth and jobs. This is why I said at the onset that agricultural industry is an essential industry which affects not only the farmer but the population as a whole.

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

We must direct and organize farming in such a way as to integrate it efficiently in the mechanism of modem economy, and more particularly the food industry. Mr. Chairman,

I cannot understand why there is so little concern about an industry which is so important for all the people of the world, since we need from the cradle to the grave the fruits of labour of that industry in order to exist. We need food every day of our lives, and it is in the farming industry that we find it.

How is it, Mr. Chairman, that the land that feeds mankind is not able to provide a living for a man? This land that feeds all human beings in the world is not able to give a decent livelihood to the one that works it for the benefit of the whole population.

We must definitely rid agriculture of its traditional characteristic of being necessarily and indefinitely dependent on the state.

Mr. Chairman, it is getting embarrassing for the farmer, year after year, to keep asking the authorities for a recognition of his rights so that he can survive and develop. We should at least ensure his survival and development permanently.

Mr. Chairman, if one day the situation of agriculture is such that the best farmers do not earn an honest reward, then all will be lost.

The economic nature of modern agriculture compels us to assure for the farmer, in all fairness, the same standard of living, the same economic and social benefits enjoyed by the other citizens engaged in economic activities requiring as much knowledge, capital and work. That must be the social and economic status of the real professional farmer.

[Mr. Lambert (Bellechasse) .1

Mr. Chairman, the farmer is not asking the state and society for a special status or special advantages. In working towards this aim, we should avoid measures and methods of organization which would tend to make the farmer a ward of the state and force us to witness, without being able to do anything about it, the progressive disappearance of initiative, of the right of the farmer to expand and improve his operations according to his means, his skills, his will to succeed, his sense of responsibility and his own efforts. We could lose a great deal.

In short, we should, I agree, give the farmer greater credit facilities but, for heaven's sake, let us not raise the interest rate and let us guarantee the farmer better and more stable prices, so that he may repay his loans without any difficulty.

Let us suppose that a 40 year old farmer borrows $25,000 to improve his farm by purchasing more land.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
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LIB

Albert Béchard (Deputy Chair of Committees of the Whole)

Liberal

The Deputy Chairman:

Order. I am sorry to inform the hon. member that the time allotted to him by the rules has expired.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
Permalink
?

Some hon. Members:

Continue.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
Permalink
LIB

Albert Béchard (Deputy Chair of Committees of the Whole)

Liberal

The Deputy Chairman:

Does the committee agree to allow the hon. member to continue his remarks?

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
Permalink
?

Some hon. Members:

Agreed.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
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RA

Joseph Adrien Henri Lambert

Ralliement Créditiste

Mr. Lambert (Bellechasse):

Mr. Chairman, I would like to thank you and my colleagues for this generosity. I will not abuse it, you may be sure.

As I was just saying, let us not raise the interest rate. Let us guarantee the farmer better and more stable prices, so that he will be able to repay his loans without too much difficulty. I was saying that if a 40 year old farmer borrows $25,000 in 1968 in order to make his farm economic, he has no hope of increasing his income in the near future unless he can get better prices for his products.

Would we have really succeeded in helping him, or would we have not in actual fact managed to bind him tighter, as well as his son who will have to take over tomorrow?

Mr. Chairman, I am prepared more than any other hon. member to collaborate fully with all my colleagues in this house and in the government, in order to try and make things better, through suggestions, work and studies of all kind. The survival of that business, that vital industry will therefore be ensured and our families will be able to keep

October 3, 1968

at it. This business, which is described as a family business, will make it possible for those engaged in its operation, to feel happy and proud to be Canadians.

Thus, if ever events threatened to snatch it away from us, we shall find people attached to the land, ready to fight as true patriots, in order to preserve something which really belongs to us and which is advantageous to the whole nation.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
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PC

George Harris Hees (Progressive Conservative Party Caucus Chair)

Progressive Conservative

Mr. Hees:

Mr. Chairman, I was rather disturbed to hear the minister indicate earlier that he might not be available tomorrow to meet the corn producers. They have spent a great deal of time and energy to come to Ottawa on their tractors to bring their serious problems to his personal attention. I hope the minister will have the good sense to make himself available all day tomorrow and meet the corn producers when they arrive in the morning. It is my belief that he will require all day to explain to them the statement he made earlier. He said in effect that the government is unwilling to do anything to help them.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
Permalink
LIB

Horace Andrew (Bud) Olson (Minister of Agriculture)

Liberal

Mr. Olson:

That is not right.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
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PC

George Harris Hees (Progressive Conservative Party Caucus Chair)

Progressive Conservative

Mr. Hees:

If the minister believes that anywhere in his statement he has indicated he intends to help the corn producers I would be interested to hear him outline the nature of the help after I have concluded my remarks.

The government has finally, six months too late, brought in the necessary amendments to the Farm Improvement Loans Act. The farmers of Canada have been deprived for months of the necessary credit they should have had through a continuous operation of the act. As a result they have been faced with two alternatives. They either had to put off necessary improvements to their farm operations because this credit was not available to them or they made these necessary improvements with money borrowed at exorbitant rates.

The minister said the other day in the house, as recorded at page 601 of Hansard that he was not able to bring in these amendments until this time. Let me read what he said:

This guarantee has been renewed by parliament from time to time in respect of loans made during three year periods. The most recent period was added in September, 1964, to run from July 1, 1965 to June 30, 1968. Hon. members may recall that it did not prove possible to deal with this measure before the three year guarantee period expired

Farm Improvement Loans Act on June 30, 1968. In view of the subsequent dissolution of the house, this is the first opportunity to bring this measure before the house for consideration.

Had the Prime Minister kept his word when he advised the people of Canada, right after being chosen leader of the Liberal party and Prime Minister, that he intended to call parliament immediately to clean up the legislation then on the order paper and then take a summer recess to be followed by an election in the fall, these Farm Improvement Loans Act amendments would have been before the house months ago and our farmers would not have been denied the credit they have needed in the past six months. The farm community would then have found it much easier to continue its operations than has been the case. This is a direct result of the Prime Minister going to the country in April. No one can disagree with the statement that these Farm Improvement Loan Act amendments, with which we are now dealing six months too late, were not passed earlier because of the unwillingness of the Prime Minister to call parliament early in May.

Farming is a business operation today, and I am sure that everyone will agree that credit is necessary to any business operation but cannot solve the problems facing our farmers today. These problems have been in existence for some time. As we know, the farmer has for many years been caught in a very real cost-price squeeze. To find out exactly how the farmer has been doing for the past ten years I obtained the relevant figures from the Dominion Bureau of Statistics which keeps such figures for the government. I wanted to find out how the farmer had been making out in the last ten-year period, what he had received for his products and what he had to pay for the things he had to buy. During this ten-year period prices paid by our farmers increased by 35.1 per cent. The prices received by our farmers for the things they sold increased by only 24.3 per cent.

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

It is easy to see from these figures that during the past ten years our farmers have become steadily worse off year by year. It is clear to us, and I hope it will soon be clear to the government, that this situation must be corrected if we are to preserve agriculture as our basic industry and if we are to preserve the family farm as the basic unit of agriculture. Far too many young men are today leaving the farm because they do not see a bright future in farming. The policies of this

October 3, 1968

Farm Improvement Loans Act government during the past five years have been responsible to a great extent for this situation.

I believe the best way to solve the cost-price squeeze in which our farmers find themselves today is for the government to establish a royal commission to examine all facets of the operation of our farmers, food processors, machinery manufacturers and all those who sell our food products in their various forms-in fact, the whole farming operation from the time the seed goes into the ground until the customer buys the product in whatever final form it is made available to him. This royal commission should also study the cost of those things the farmer has to buy in order to carry on a normal operation. It is important to find out who is making an abnormal profit in this whole process.

One thing is sure, our farmers are not making an abnormal profit; they are making only a reasonable and steadily declining profit, as is made clear by the figures I mentioned a few moments ago. The profit of our farmers has been slipping year by year. The situation of our farmers has become steadily worse. If we are to retain agriculture as our No. 1 basic industry, keep young farmers on the farm and make it possible for the family farm to remain our basic agricultural unit, we must solve the problem of why the cost-price squeeze has been increasing year by year.

So I once again urge the government to establish a royal commission to examine this whole problem in all parts of the country. We must do whatever we can to solve the problem with which farmers have been faced for many years and which has become worse year by year. The cost-price squeeze is gradually throttling the farming industry in Canada.

I should like to speak briefly about one of the problems which our farmers face. This problem particularly affects farmers in the province of Ontario and points up the need for credit being made available quickly and at low interest rates in order to help farmers who are faced with serious adverse conditions in their farming operation.

I speak particularly of the problem of those who grow and process tomatoes in Ontario. I have been advised by the president of the Ontario food processors that the average processed cost of canned tomatoes and tomato juice is $5.30 a case of 24, 28-ounce cans. Canadian growers and processors have been encountering very serious competition from processers and growers in France, Spain and

[Mr. Hees.l

Bulgaria. The products produced in these countries can be landed and sold in Canada at a price that varies between $5.20 and $5.60 a case. The reason these products can be landed and sold at this low price is that in each of the three countries I have mentioned the product is subsidized by the government.

This situation was made clear to the government earlier this year by two organizations, the Ontario food processors in their very excellent brief presented to the government, and the Canadian food processors in their very excellent brief. These briefs pointed out clearly the problem faced by our growers and processors. They pointed out the subsidy paid per case in the countries of origin of those products. They asked very earnestly that the government impose a countervailing duty on these products, when they land in this country, equivalent to the subsidy paid in the country of origin. That is a sensible request. If this is not done, our processors and growers cannot fairly compete with processors and growers in the countries I have mentioned. The present situation is having a very detrimental effect on Canadian growers and processors.

I strongly urge the government, and the minister who recently took over this portfolio, to seriously examine these excellent briefs which were presented earlier this year to the government. I urge the government to impose countervailing duties equivalent to the subsidies paid in the countries of origin. The situation that exists is making it impossible for Canadian processors and growers to make a reasonable profit, to be able to compete, stay in business and help the Canadian farming industry to flourish and produce a good livelihood for those who subsist by the industry.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.
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October 3, 1968