July 4, 1935 (17th Parliament, 6th Session)

PC

Errick French Willis

Progressive Conservative

Mr. WILLIS:

It so happens that to-day the Liverpool market broke four cents. I do not know whether that break in the market has any connection with paragraph (c) of section 8 which is the selling policy indicated by this bill. Lest it be thought-and I do not think this is in the mind of anyone in this chamber -that the wheat board intends to dump the stocks of wheat on the markets of the world, I think the other meaning of .paragraph (c) of section 8 should be given some emphasis. It reads:
To sell and dispose of stocks of wheat and contracts for the delivery of wheat acquired from Canadian Co-operative Wheat Producers Limited and the wheat represented by such contracts as speedily as may be reasonably possible, having regard to economic and other conditions.
I desire to refer particularly to those "economic and other conditions," because it would be a very bad thing if any thought went out from this bill or from its clauses that we in this country were going either to dump our wheat on the markets of the world, or on the other hand unduly to withhold it from those markets. Therefore it might be interesting to mention some of the difficulties, some of those things which would prevent us from dumping our wheat on the markets of the world at this time. I desire to make a short quotation from the evidence of Mr. John I,
Grain Board

McFarland before 'the banking and commerce committee on March 22, 1934. He said:
Looking back at the problems that have confronted Canada, as well as other exporting countries, we find France with an 85 cents per bushel duty, with restrictions on milling and quotas, protecting their farmers up to the hilt so that they will get big prices for their wheat and encourage them to raise more; and that has been going on for three years. Germany with $1.62 duty doing the same thing. Italy with $1.03 duty and doing the same thing, their farmers all protected behind great tariff barriers, barriers that it is impossible for our farmers to climb over. Then there are other lesser countries doing the same thing to a smaller degree but to a considerable extent increasing the prices to the native farmers in those countries. Then we look at Australia. Australia is -bonusing her farmers. This year they are paying $1,500,000 to their farmers. The Argentine has virtually got a wheat board, giving their farmers a good deal more money for their wheat than what they are selling it at overseas. The United States during this period have spent I don't know how much of that $500,000,000 in support of wheat farmers, in all probability $150,000,000 or $200,000,000 of it has gone to American wheat farmers. Not only that but now they are paying them a processing bonus of so much per bushel in order for the American farmer to get through these trying times of depression. Japan protects her farmers to the extent of about 40 cents a bushel. China protects her farmers against our cheap wheat to the extent of nine cents, I think. These are all the difficulties that our farmers have had to face in these trying times.
Then further down;
I forgot to mention the United Kingdom. Like all other countries, they are helping their farmers to the extent of $1.35 per bushel.
In view of the fact that for the time being at least the selling of wheat will be continued by the same agency, I think I might very well quote from Mr. Mclvor's evidence a paragraph indicating also some of 'the difficulties in regard to selling wheat at this time, and some of the reasons perhaps why we have not sold more. I refer to his evidence as set forth on page 376 of the minutes of proceedings and evidence of the special committee on Bill No. 98. Mr. Mclvor said;
There are still those who say, however, that Canada might have done better, and this suggestion prompts me to place before this committee a few relevant facts:
(1) All exporting countries, including Canada, have been affected by the reduction of imports into France, Germany and Italy. Broadly speaking, such decreases as have taken place in the other importing countries have been offset by increased requirements in the United Kingdom. Netherlands, Belgium, et cetera.
Let us examine the situation in France, Germany and Italy. From 1924-25 to 1928-29 these countries imported an average of 215,900.000 bushels annually. From 1929-30 to 1933-34 these countries imported an average

of 95,000,000 bushels-an annual reduction of 120,000,000 bushels in the latter period as compared with the former_______
Assuming that we received 40 per cent of the imports of these three countries prior to 1929-30 (a moderate percentage) a market was afforded for about 85,000,000 bushels of Canadian wheat. Last year if we had secured the entire market of these three countries (and we did receive a very large share) we had an outlet for only 26.000,000 bushels. This is one phase of the export problem which must be realized.
(2) It has been repeatedly stated before this committee that Canada should have lowered her price and sold more wheat. Mr. Richardson stated that he could have sold more Canadian wheat if the price had been 70 cents per bushel. I cannot agree with that type of reasoning. Those *who hold that Canada could have sold more wheat by lowering prices must at the same time demonstrate, first that such action would have resulted in the lowering of the spread between Canadian wheat and other wheats, particularly Argentine; and secondly that a narrowing of the spread betwreen Canadian wheat and other wheats would have curtailed the movement of competitive wheats- chiefly Argentine wheat.
Let us briefly deal with these two points. In regard to the first point, namely the possibility of narrowing the spread between Canadian wheat and other wheats, I wish to point out that price as such may not be significant. It is not the absolute price of Canadian wheat which is important but rather the relative price; that is, the relation between the price of Canadian wheat and the price of other wheats.
If we dropped our price ten cents and the Argentine dropped ten cents the relative positions would not have changed and both countries would lose. Actually that is what happened last fall.
Then he goes on to quote the figures in that regard. In addition, without quoting more of the evidence, I think it is interesting to look back to the debacle of 1933, to indicate that the sales agency at that time made large purchases; particularly they purchased on one day 15,705,000 bushels. They have been criticized for that purchase. But from the facts given to the committee, it was very evident that at that time the Chicago exchange had closed, and consequently it was necessary for Mr. fyloFarland to step in and make purchases lest the whole market itself within this country be destroyed. He did that at that time; he made heavy purchases later even though the price was fairly high, but in spite of the purchases which he made, the market continued to decline. It was in the technical phrase a "thin market." Consequently those purchases had to be made. Therefore I think at this time owing to the fact that we do to a degree outline a selling policy, it must be made very evident that there is no intention on the part of anyone

Grain Board
in this country to dump our present wheat supply on the markets of the world. Nor is it the hope of anyone in this house that we should withhold from the markets of the world that wheat which we can sell at prices which will give to the producer some return for his labour.

Topic:   QUESTIONS
Subtopic:   CANADIAN GRAIN BOARD
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