May 4, 1972

LIB

Ross Mackenzie Whicher

Liberal

Mr. Whicher:

Mr. Speaker, we all agree that much could be done to improve agriculture. We agree, for example, that hog prices are not as high as they should be, that dairy prices are not as high as they should be and that grain prices are not as high as they should be. Last fall, several months ago, we introduced a bill into this House that had taken between 18 months and two years to prepare. It was Bill C-176. The farmers of Canada asked for that bill.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
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?

An hon. Member:

The farmers of Ontario.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
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LIB

Ross Mackenzie Whicher

Liberal

Mr. Whicher:

it was introduced in order to bring about effective national marketing in the whole of Canada. It was to give the farmers of Canada an opportunity to sell their products, to run their show, to curtail production if necessary, and so on. After all, General Motors does not continue producing thousands of cars after it has sold a certain number. Massey-Ferguson does not attempt to supply thousands of tractors after the market is saturated.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
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PC

John Patrick (Pat) Nowlan

Progressive Conservative

Mr. Nowlan:

How many agencies are there, Ross?

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
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LIB

Ross Mackenzie Whicher

Liberal

Mr. Whicher:

The point is that under Bill C-176, the bill bringing in a national marketing plan, this government offered the farmers of Canada an opportunity to run their own show, that is, to produce them, manufacture them

May 4, 1972

where necessary and sell them. What was the only party in Canada that was against national marketing? The Conservative party was that party. That was the only party against the legislation, even though the National Farmers Union and the Federation of Agriculture supported it.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
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?

An hon. Member:

No.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
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LIB

Ross Mackenzie Whicher

Liberal

Mr. Whicher:

The fact is that the only party in this House that was against this legislation was the Conservative party.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
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PC

John Patrick (Pat) Nowlan

Progressive Conservative

Mr. Nowlan:

They had the wisdom to try to change the bill.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
LIB

Ross Mackenzie Whicher

Liberal

Mr. Whicher:

Mr. Speaker, they were against it even though the Conservative party of Ontario, their strongest base, supported the bill. They were against it even though every major organized farm group in Canada supported it. They were against that bill because they thought they had a political animal in their hands.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
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PC

John Patrick (Pat) Nowlan

Progressive Conservative

Mr. Nowlan:

We were critics. We fought a reasonable battle.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
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LIB

Ross Mackenzie Whicher

Liberal

Mr. Whicher:

Now they have a tiger by the tail, a real tiger.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
PC

John Patrick (Pat) Nowlan

Progressive Conservative

Mr. Nowlan:

How many farmers are for it? How many farmers have an agency, Ross?

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
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LIB

Ross Mackenzie Whicher

Liberal

Mr. Whicher:

Mr. Speaker, it is not a case of how many agencies there are now, but how many agencies there will be in future. A chairman has been appointed and several board members have been appointed. We are going to look after this program we know perfectly well that the hon. member's party cannot do it.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
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?

Some hon. Members:

Hear, hear!

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
LIB

Ross Mackenzie Whicher

Liberal

Mr. Whicher:

This afternoon, Mr. Speaker, I listened to the hon. member for Crowfoot (Mr. Horner), one of the chief agricultural experts in this House. I have listened to him for a long time. It is too bad that my hon. friend has not been listening to him because he would have learned something. He spoke about the forgiveness clause introduced by the hon. member for Mackenzie (Mr. Korchin-ski), and the postponement of interest.

I also listened to the previous speaker. He said it is too bad the farmers of Canada have to pay 8 or 8} per cent interest. There is not a single member, whether he be Liberal, Conservative, New Democrat or Creditiste, who does not agree that the interest rate for farmers is too high. We also agree that interest is too high for housing, business and everything else. The government of Canada must borrow this money and someone must pay the interest.

I was somewhat amused when listening to the hon. member for Mackenzie yesterday afternoon. He brought in an amendment suggesting that interest should be postponed or reduced. I was amused by the hon. member for Crowfoot and, indeed, the hon. member for Annapolis Valley when he suggested the interest rate should be

Farm Credit Act

reduced. One of the things the Conservative party has done is stick up for the views of the Auditor General of Canada. At every opportunity they have castigated the government because they feel the government has not been fair to the Auditor General.

I refer to that part of the last report of the Auditor General of Canada which deals with the Farm Credit Corporation. This is the man the Conservatives have been sticking up for over the past two or three years and trying to shove needles into the present government. This is what he said:

It has been pointed out previously that the statutory lending rate of 5 per cent on loans to farmers has not provided sufficient income to cover the interest paid on borrowings from Canada and administrative expenses. Although the statutory rate was abolished with effect from November 15, 1968, annual losses will continue to be incurred with respect to outstanding loans totalling $746 million at March 31, 1971, which still bear interest at the statutory rate of 5 per cent. Since 1963 these losses have been recovered from annual parliamentary appropriations provided for the purpose in order to present further depletion of the reserve for losses. However, this policy does not provide for the building up of the reserve to an amount equivalent to the capital of the corporation as is contemplated by the Farm Credit Act.

This report says it is not right that the farmers of Canada should be subsidized by the other taxpayers of Canada under our legislation. This criticism is by the Auditor General of Canada whom the Conservative party endorses at every possible opportunity.

In conclusion, there is no one in this assembly, particularly those who come from agricultural areas such as myself, who feels that the farm areas have had a square deal in the past. There is no one who does not feel that the interest rate on farm credit loans should be lowered. On the other hand, we have to face the facts of life. The fact is that the average farmer does not want to be subsidized; he just wants a square deal.

In my opinion, Bill C-5 gives the farmer a square deal, an opportunity to borrow money when he cannot borrow it anywhere else, an opportunity to get into business and an opportunity to be able to pay it back under reasonable terms. For this reason I intend to support this bill. I do not intend to support the amendment of the hon. member for Mackenzie because there is too much socialism involved in it. He is asking us to cut down on the expense. We cannot do this, and the average farmer does not want it to be done. Therefore, Mr. Speaker, I intend to support this bill presented by the Minister of Agriculture because it is a very good measure. Under no circumstances, can I support the amendment of the hon. member for Mackenzie.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
?

Some hon. Members:

Hear, hear!

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
PC

George Harris Hees

Progressive Conservative

Hon. George Hees (Prince Edward-Hastings):

Mr. Speaker, I rise to speak very briefly on this bill to amend the Farm Credit Act because I believe that improvements to the act can greatly assist our farmers, particularly our young farmers starting on their careers. Yesterday the spokesman for the official opposition, the hon. member for Mackenzie (Mr. Korchinski) proposed an amendment which I intend to support and which I hope every member of this House, on reconsideration, will decide to support. I shall read that amendment:

-that it be resolved that in the opinion of this House the govern-

May 4, 1972

Farm Credit Act

ment should give consideration to the introduction of legislation to amend the Farm Credit Act by incorporating the incentive principle-already approved by this House in other legislation-to provide for partial non payment of interest where young farmers meet performance standards, for deferred interest payments on all loans during an initial period, for equitable adjustment of interest rates for the benefit of borrowers; and, as well, to provide for open-end loans which will allow additional borrowing without refinancing costs.

I believe that the measures outlined in the amendment will make it possible for the government to treat the farmers of this country in the same manner as industry is treated, enabling them to obtain the capital they need to carry out their day to day operations. I believe it is only fair that this should be done because today farming is very much an industry. It is an industry which requires capital on the most generous terms possible to permit successful farming operations to be carried out.

As we all know, industries receive forgivable loans based on satisfactory performance in order to enable them to get started. I believe that our young farmers should receive the same treatment. New industries are permitted to defer payment of interest on loans during the initial period. This is also done to enable new industries starting up to get into operation, grow, expand, be successful and employ people. I believe that our young farmers should receive the same kind of accommodation. I also believe that it makes economic good sense to provide open-end loans to permit additional borrowing without incurring refinancing costs.

It is because I feel so strongly that the measures outlined in the amendment which I mentioned a few moments ago will do the kind of job for our farmers, particularly young farmers starting out on their careers, that I very strongly urge all members of this House to support the amendment which has been proposed by the official opposition, and by so doing join with the party to which I belong in helping the farmers of this country to operate in the future in a more profitable and effective manner.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
?

Some hon. Members:

Hear, hear!

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
NDP

Roderick J. (Rod) Thomson

New Democratic Party

Mr. Rod Thomson (Battleford-Kindersley):

Mr. Speaker, I have read with considerable interest the amendments which are proposed to the Farm Credit Act. A number of members have commented on their experience of the working of the Farm Credit Act. My experience has probably been somewhat different from theirs because I once had occasion to take out a loan on some farmland. It is now repaid.

I should like to make some observations about the Farm Credit Act based on my experience. I am aware that some of the officials concerned are with us this evening, but were they not present I would say the same things. I have found the officials of the corporation to be, generally, educated people aware of the problems of farming. I have found them to be fair minded. I do not think they would knowingly help a farmer into trouble by arranging a loan which they felt he would be in no position to repay. I believe most of them would do their best to work out a package which a farmer could handle. This would be my general observation in connection with the corporation

officials I have spoken to and those with whom I have become acquainted in Ottawa.

I should like to make one reservation, though, and I would call the minister's attention to it. During the period 1966 to 1968 when we were selling a lot of grain to China, Russia and other places, not only were farmers affected by the enthusiasm which those sales generated in western Canada and in Canada as a whole, but FCC officials were, it is possible, also carried away by it as a result of which they granted loans to buy land at prices which have proved very awkward for farmers to manage. The officials might say that they did not lend as much money on this land as did some private corporations. I have in mind certain insurance companies which lent money in amounts and on terms which have placed many farmers in a difficult position.

I draw attention to this aspect because I believe we may witness a similar situation in the future. Logically, the price of land has to increase, but I believe we should be careful about how much money we pour into the land market. More attention should be paid to the productive value of the land, bearing in mind good years and bad years. I do not think it does anyone a service to lend $100,000 in circumstances where the borrower has no means of paying it back. I draw this to the attention of the farm credit administration with the best intent in the world. I know what the circumstances are. My initial experience of attempting to borrow money was that I could not get any. And after I was in a position to borrow, I had trouble paying the money back. I think one can go too far both ways; one should treat these matters very carefully.

I should like to make one or two observations in connection with a question which I directed to the Farm Credit Corporation through the Minister of Agriculture (Mr. Olson) a few days ago. I asked what percentage of farm credit loans are presently in arreas compared with the years 1969, 1970 and 1971. As I recall, we have seen a jump in Saskatchewan, for example, from 11 per cent to about 21 per cent. In some of the other western provinces there has been a jump from 14 per cent to about 24 per cent. This indicates that at least a portion of our agricultual industry is in trouble. The Farm Credit Corporation should not be blamed for this. There may have been the odd bad loan, but the situation really has to do with the agricultural policy of the government plus other factors such as lack of markets in the rest of the world.

I cannot help thinking that had we been more aware of the importance of marketing we might not today be in this awkward situation in western Canada. For example, had the Canada Grain Act been introduced ten years ago we might have retained some of the markets we lost to Australia and Russia, the first countries to introduce the protein grading system. Where were we at the time? Take the case of Syria and certain other grain importing countries. We did not sell any grain to those countries between 1952 or 1953 and a relatively short time ago. In effect, we neglected one aspect of our agriculture, and despite the best efforts of those administering the act we are now considering, failure to take into account the whole picture means that the farmer who is caught in the middle finds himself in acute trouble.

May 4, 1972

Consider, for example, the final payment on grain which might in certain circumstances bring $8,000 to an individual farmer. When this payment drops to roughly one-sixth of that sum, or down to nothing, it is a good indication of the trouble we are in. This is what has happened to the grain community in the part of the world from which I come. This is the kind of payment upon which many people depend. When it drops to nothing, the consequences can be imagined.

We recognize that farming has changed. I do not wish to quote a lot of statistics; much has been done along these lines already. It used to be, in my part of the country, that if a man wished to rent a farm he rented one third of the crop. Today, with the advent of quotas and government subsidies, the man who owns the land might as well say, "Give me $1,000 a quarter and all the other problems are yours." We see a change from one type of tenure to another.

In Saskatchewan there is a great deal of pressure to establish a land bank. I wish to speak about this matter for a moment because it is related to a clause in the bill pertaining to the small farm development project which the Farm Credit Corporation is to administer. As I understand the discussion between the federal government and the provincial governments, particularly the government of Saskatchewan there has been some argument in this regard. I also understand the proposed small farm loans administration would be in the hands of the Farm Credit Corporation, the counselling and farm management policies which formerly were in the hands of the provincial governments. If this should be done without the co-operation of the provincial governments, we would have a duplication of such facilities. I am concerned about this. I feel that the federal and provincial governments should not compete to give farmers, at least in my province, the logical advice they ought to receive, particularly the small farmer who in most cases would be a beginner.

The provincial government is to establish a land bank or rental scheme for the younger farmer establishing himself on the farm. I believe there could be some conflict here. My suggestion to the province of Saskatchewan, to the federal government and to the other provincial governments which might be involved in similar small farm programs with the federal government, is that we should not have competing views in this area. I suggest to the minister that he should not give up easily in his attempts to work out a solution with the provincial governments.

I suppose, being an opposition member and being politically allied to the Saskatchewan government, in this case I could argue that the federal minister is wrong; but I do not wish to do that. I believe only the farmers would be the losers. I suppose the taxpayers in Saskatchewan and federally would also be the losers. While I am not aware of what might be going on in other provinces, I would think some of the discussions would be in similar vein. So I suggest that the minister continue his efforts to find a solution with the provinces, rather than insist upon establishing a program which would do some of the things I have mentioned.

Farm Credit Act

I am also a little worried about the $100,000 loan maximum provided in the bill. I am aware that the price of farmland is going up, but I wonder about adding fuel to the fire. As I indicated earlier, it would seem to me that we have occasionally helped farmers pay more for land than they logically should have paid, particularly when one considers the return from such land. Some farmers now are in a position in which they are hardly able to pay the interest, let alone anything on the capital, not to mention operating expenses.

Some individuals attempt to solve their problems with the help of someone whom they believe is in the know and has more technical knowledge in respect of farm credit and farm management than they have. When we consider the desire of many individuals, not merely farm boys, to have a farm of their onw and establish a business where over their lifetime hopefully they can make a go of it economically and add to the well-being of mankind, I think we should be a little careful. It has been suggested to me by some thinkers in the agricultural policy field that if we allow farmers loans of $100,000 this will increase the price of land. I believe this is true even under the old loan ceiling.

If we approve this extension, I believe the Farm Credit Corporation should exercise judgment in respect of how much it will allow an individual to borrow. Sometimes I think some of the suggestions we have made to help individuals have not reflected on the people who borrow the money. Too often they have resulted in a higher income for those who sell the land. While I believe the farmer or person who owns land has a reasonable claim to a fair and equitable price, I do not believe we should encourage this by subsidization, if you like. I suggest we should exercise a little judgment in this regard.

Mr. Speaker, may I call it ten o'clock?

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
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LIB

Russell Clayton Honey (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

The hon. member may call it ten o'clock if there is unanimous consent. Is there unanimous consent?

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink

May 4, 1972