Mr. WILLIAM BRYCE (Selkirk) moved:
That, in the opinion of this house, the government should take into immediate consideration the advisability of appointing a board of live stock commissioners in Canada, for the purpose of regulating and controlling the assembling, transporting, grading, marketing and exporting of live stock and live stock products.
He said: There is no branch of agriculture, Mr. Speaker, in which there is as much confusion as exists in connection with live stock to-day. We have a great many government appointed boards, committees, supervisors, inspectors and investigators, all of whom appear to lack the cohesion necessary for the efficient operation of this important branch of agriculture. I therefore appeal for legislation to be enacted by the federal government to make possible the creation of a board of live stock commissioners, the majority of the members of which shall be recommended by
farm organizations. This board would parallel in a general way the work done by the board of grain commissioners in the regulation of the grain trade.
Might I point out to the house that this is not a political gesture but something the farmers have fought for ever since I came to Canada twenty-six years ago. Farm organizations all over the dominion have repeatedly asked for this legislation. I do not intend to take up the time of the house by reading all the resolutions which would prove my statement, but I am going to quote from the brief presented to the cabinet by the Canadian Federation of Agriculture in February, 1944:
This federation desires to repeat its request of former years that the federal government should establish a board of live stock commissioners, with powers and duties similar to those of the board of grain commissioners. It requests that the said board be empowered to administer, under the Department of Agriculture, the Live Stock and Live Stock Products Act, and that the members of the board shall be appointed in consultation with organized agriculture. The Live Stock and Live Stock Products Act should be amended and consolidated with other legislation in order to vest in the board the power to license, regulate and control the facilities for assembling, transporting, yarding, slaughtering, processing and packing, together with the facilities for grading and selling all live stock and carcass products designed for human consumption. . . .
Their recommendation in this connection in the brief presented to the cabinet in February, 1945, was quite short, and I am going to place it on record also:
We again wish to record our sincere conviction that many of the problems of live stock marketing as regards assembling, grading, price differentials, transportation, processing, and the regulations governing these matters, can best be solved by the appointment of a board of live stock commissioners. We therefore repeat our request, made on previous occasions, for the setting up of such a board.
This board should be empowered to administer, under the Department of Agriculture, the Live Stock and Live Stock Products Act; and the members of the board should be appointed in consultation with organized agriculture. The act should be amended and consolidated with other legislation in order to vest in the board power to license, regulate and control the facilities for assembling, transporting, yarding, slaughtering, processing and packing, together with the facilities for the grading and selling of live stock and carcass products designed for human consumption. The board should have power to make such levy on the products under its jurisdiction as may be necessary to defray the cost of its operations.
Speaking, on a previous occasion in the house, I said that some of the surplus money accumulated in the condemnation fund could quite easily be put to that purpose. With such a board in operation it should be possible to deal satisfactorily with many causes of difficulty and dissatisfaction to producers, which frequently arise. It would be of particular importance in developing a system of grading live stock and live stock products under which standards of grading to consumers in Canada, or for the export trade, and to producers might be coordinated as closely as practicable.
I wish to direct the attention of the government to the disability suffered by live stock producers from time to time, when the congestion of transportation facilities, packing plants or cold storage warehouses prevents live stock in process of marketing from being disposed of or being delivered for sale at the normal plant or slaughter-house. In the past western Canada has shipped hogs over two thousand miles to have them slaughtered. This is a serious business, and we hope1 that sort of thing will never occur again. I am also of opinion that existing price control regulations do not provide adequate protection to cattle producers. To-day certain classes of cattle are selling at below their value. It should also be pointed out that favourable weather conditions this fall have enabled producers to maintain an orderly movement of cattle to market It is obvious that any
break in weather conditions would bring a rush of cattle to market which would immediately aggravate the situation.
There has been a pronounced trend in Canada toward larger business organizations, and in many cases toward monopolistic markets. The meat packing industry, and other distributing organizations have in general followed this trend, and a large part of the purchasing of western live stock is done by three companies. The concentration of buying power in the hands of three firms is a serious situation. Concentration in the buying of live stock has been accompanied by the weakening of the position of the producer as a marketer. The protection which the producer had in the public market has now practically disappeared.
It is my view that the position with respect to the marketing of live stock is simply that buying is now concentrated in a relatively few hands, and selling is largely disorganized and ineffective. Under these conditions we cannot expect adequate provisions making for a sound live stock industry in Canada.
Since 1920 a great change has taken place in the method of marketing live stock, and particularly in that of marketing hogs. This
change came in the form of direct buying by the packers, and a decreased use of public markets. In 1920 only about five per cent of Canadian hogs went direct to the plants, whereas in 1938 we find that eighty-five per cent of all hogs went direct. Whatever strength or weaknesses were involved in the public markets system, it used to perform an important function, namely that of providing a meeting place for buyers and sellers, and of registering from day to day price levels which reflected competitive bidding for the vast proportion of live stock marketed in Canada.
At the same time, with sixty-five per cent of our live stock going direct to the packing plants, and only thirty-five per cent passing through the public market it cannot be said that the public market is a proper indicator of the value of live stock, because packing houses to a very considerable extent are now independent of the supplies which come on the public market.
If, as a result of direct buying, values are not finally established in the public yards, price making for live stock is not a matter of public negotiation. Under these circumstances prices of live stock are largely determined on the basis of the prices packing houses are prepared to offer on any particular day, and not as a result of a thorough bargaining process.
It may be argued that under a system of direct buying, bargaining actually does take place between the producer or his representative or agent, and the packers, in so far as the packer must offer a price sufficient to induce the producer to sell in the desired quantities. This situation, of course, is not significant in the practical marketing of hogs because, owing to the grading regulations now laid down, the producer has little or no choice as to the time at which he will sell his product. Penalties are attached to overweight and underweight hogs, and these strict grading regulations have limited the choice which the farmer may exercise in respect of the time at which he sells his hogs. His product must be sold, no matter what the offered price may be.
The board would give continuous study to the steps necessary to make more efficient and satisfactory the services of our public central markets, and the insurance of competitive bidding in the sale of live stock.
Direct shipment to packing plants has developed very rapidly and, if increased to any marked extent, may make doubtful the continuation of our public markets. This would mean a monopoly of buying in the
[DOT]hands of the packing plants. Such a development would have serious consequences to our producers.
The whole problem demands serious study. One-half of all the hogs delivered at the stockyards in 1938 arrived by truck, and in the same year one-third of the cattle came by truck. If truck shipments delivered direct to the packing plants were included, the percentage of the total shipped in this way *would be considerably increased.
One thing we must remember is that the man who trucks stock to the market is a trucker; he is not a producer. He is more concerned about a full pay load than about the selling of the animals. Two complaints are brought against the method of marketing. One is that it is claimed that packers buy live stock from truckers at less than stockyard prices. A check made by investigators for the price spreads commission in the month of March, 1934, seems to support this contention. The packer has complete freedom of grading, when buying direct. In addition, direct purchases are made on an off-car basis, while in the stockyards animals are fed and watered before being sold. This may make a difference of seventy-five pounds in a 1,000-pound cow. The farmer saves the commission merchant's fee, the stockyard charges and part of the freight he would otherwise have to pay. In spite of these savings, it is probable that he obtains from direct sales a smaller net return than could be obtained from selling on the public yards.
Secondly, it is argued that the weakening of the stockyards system by a process of direct sales is deterimental to the producer. This seems a reasonable argument. The elimination of the central competitive market would probably put the producer at a considerable disadvantage in selling to two or three large buyers. If we are to establish fair economic returns, and security for primary producers, I do not believe we can ever again rely upon the automatic processes of what in the thirties was erroneously termed a free competitive market. Such automatic processes broke down hopelessly in the depression years, and are now almost completely *discarded as incapable of the supreme test of war-time conditions.
In one of his speeches Mr. Donald Gordon, *chairman of the war-time prices and trade hoard, said:
Selfish and private interests must be ruled out completely and the competitive system must be replaced with one which is based entirely upon the criterion of maximum production.
Having failed us in these two periods, it would in all probability be disastrous to risk
the return to such automatic processes in the post-war period, one which promises to be the third and not the least of a series of national emergencies. I am therefore suggesting that the live stock industry in Canada should be brought under public regulation through a board of live stock commissioners, and that that board be constituted with producer appointed representation thereon. Such a board might be composed of nine members. Of these the chairman, vice-chairman and one other member should be salaried and devote their full time to problems of the live stock industry. The others should be representative of producers, consumers, government services and the packing industry. They should attend meetings when required and serve without remuneration, except for fees and expenses for each meeting.
The powers accorded to this board should cover, among others, the following points:
1. The administration of the grading of live stock.
2. The regulation of all purchasing agencies, including country buyers.
3. The regulation of public and private live stock markets.
4. The establishment and maintenance of export standards.
5. The hearing and investigation of complaints from producers, marketers or processors with respect to any live stock problem.
6. The regulation and publication of grade discounts.
7. The supervision and auditing of condemnation insurance.
8. Continuous study of the economic basis of the live stock industry, including:
(a) Methods of stabilizing live stock prices.
(b) Methods of securing a better seasonable distribution of marketing.
(c) Methods of securing and maintaining adequate feed supplies and promoting their distribution within Canada.
(d) Methods of improving the quality of live stock.
(e) Promotional work in securing export markets.
(f) Methods of narrowing the spread between prices to the producer and prices to the consumer.
(g) Methods of extending research and statistical facilities.
(h) All other matters affecting the live stock industry.
In conclusion, I would say that farmer representation on such a live stock board should be the strongest available. It is no place for political appointments. The greatest interest in the live stock industry is the
interest of the men and women who produce the live stock, and it is a matter of prime importance that they be fully and adequately represented on such a body. I hope the government will do something about this matter without any further delay.
Mr. MARK C. SENN (Haldimand): Mr. Speaker, I have listened with a good deal of attention to the arguments which have been advanced by the hon. member who introduced this motion. I think this motion is of extreme importance to the farmers of Canady. For many years the production of live stock has been an important branch of agriculture, not only in this country but I believe in every country of any consequence in the world.
If the fertility of our soil is to be maintained our farmers must not grow crops year after year without returning something to the land. Such a course may be successful for a while, but the land will finally become exhausted and crop failures will be the inevitable result. It is a proven fact that the best way to maintain the fertility of the soil is to raise animals on the farm. I think it is also a proven fact that the best way to market our crops is to feed them to live stock and then market the live stock. The production of live stock has steadily and gradually increased in Canada for a great many years, and this increase has been very marked indeed during the years of the war.
In a return brought down in answer to a question asked by the hon. member for Souris (Mr. Ross) it was shown that the hog population of Canada in 1939 was 4.360,000. In 1943 it had risen to over 6,000,000. The cattle population in 1939 was 4,693,000, and this had risen to over 6,000,000 in 1944. Another return showed that the value of cattle marketed in Canada in 1944 was $202,000,000 odd. The value of hogs marketed during the same year was $323,000,000. The value of sheep marketed was over $12,000,000. The over-all total was $538,000,000 worth of live stock marketed in Canada during 1944.
These figures illustrate clearly the importance of the live stock industry to agriculture generally throughout Canada. It is an obvious fact that this live stock is produced by thousands of farmers. There are over 740,000 farmers in the Dominion of Canada, and well over sixty per cent of those farmers produce live stock on their farms in some way or another.
It is an obvious fact too that production is only the first stage in the live stock industry. It is manifestly impossible for a farmer to slaughter his animals and process them for domestic consumption or for the foreign
market. The result is that a large army of men has grown up throughout the country for the purpose of collecting, processing, grading and distributing our live stock. This army of men is continually taking a toll of consumer prices that are realized and on the whole, the producer must be satisfied with what is left. Middlemen are indispensable in the live stock industry, because they are performing a useful and necessary service. They must have an adequate reward for the performance of those services, but I think it is apparent to everybody that the time has come when some control of this vast and intricate system should be set up.
As the mover of the resolution has stated, a similar condition prevailed at one time in the wheat trade, and the board of grain commissioners was finally set up under the grain act to control and regulate all aspects of the wheat trade. At the time that board was set up there was considerable opposition, and I have no doubt that there will be considerable opposition to the idea outlined in this motion. However, I wonder if there is anyone in this country who would advocate a return to the conditions in the grain trade that prevailed before the board of grain commissioners was set up; I wonder if there is anyone who would advocate its abolition. I do not believe there is anyone in Canada who would do such a thing.
No doubt the same arguments that were advanced when the board of grain commissioners was set up will be advanced at this time. It will be argued that there is machinery already in the Department of Agriculture to regulate and control the live stock industry in all its aspects. It is true that there are many capable men in the Department of Agriculture; they have done good work, and I "can find no fault with them or with the work they have done. At the beginning of the war, under the War Measures Act, a number of boards were set up, what you might term war boards. The first was the agricultural supplies board. It would not be possible for me to read into Hansard at this time all the duties that were conferred upon that board by the order in council which set it up. One principal thing, the basis of all duties which were enumerated there, was:
To direct and regulate through the various dominion and provincial agricultural services and through advisory boards representative ot the industry which are already constituted, or which may be established, the production, preparation and conservation of farm products.
A little later an agricultural food board was set up under order in council P.C. 5163. Briefly, the duties of this board are as follows:
Subject to the approval of the Minister of Agriculture and in cooperation with the agricultural supplies board to develop and direct the policies and measures of the Department of Agriculture for the wartime production of food.
A third board, known as the bacon board, was set up, and that board was later renamed and reconstituted as the meat board. It had certain powers, and I want to read one or two of them to the committee, because I believe it shows how important they are, and to what extent their powers could go if they carried them all out. May I say in passing that the meat board did take over the export trade in meat products to, I believe, all the countries of the world. At least the export trade which had formerly been carried on by private enterprise was taken over by this meat board. Here is one of the things they were allowed to do under the powers conferred upon them:
To determine the prices which shall be paid to packers or other persons for meat delivered for export. . . .
And so on. They were to determine the prices which should be paid to packers. Under another clause, paragraph (e), they have power to fix the minimum price to be paid by packers or other persons for live stock. I do not believe they ever exercised that power, hut it indicates how broad their powers are and how necessary it seemed at the beginning of the war that there should be some supervision of the meat trade. I suppose that when the War Measures Act goes out of force, or very soon afterwards, these boards, unfortunately, will automatically cease. Whether they do or not, I think I have said enough to prove that some kind of supervision is necessary over the whole live stock industry if it is to flourish as it should.
What are some of the reasons why a live stock commission should be set up? Just speaking in generalities, because I do not want to go into particulars, I would first say that they should see that the farmer, who is the primary producer, gets a square deal. They should see that the farmer receives a fair share of the consumer's dollar. They should see as well that efficient production of live stock is made possible for the live stock producer. I think they should also ensure- from the other angle-that the consumer is not exploited. They should see that he does not have to pay too much for services rendered in bringing meat products to the consumer's door. They should see as well that the spread between producer and consumer
prices does not widen and continue to widen as it has done in days gone by, but on the other hand is reduced to the narrowest possible margin consistent with giving a fair return to the middlemen who have to process and distribute the food. To accomplish this, the proposed live stock commission should, as the hon. member for Selkirk (Mr. Bryce) has said, be free from political influence, and I believe its powers should be clearly defined by amendments of the present live stock act. May I point out in passing that the leader of the party to which I have the honour to belong advocated at Lethbridge in 1943 that a live stock commission should be set up with powers somewhat similar to those of the board of grain commissioners.
Reference has been made by a previous speaker, and by myself, to the fact that the wheat board has done a remarkable piece of work for the people of this country, and particularly for wheat producers. But that is not the only board which has been set up for similar purposes. In 1933 the select standing committee on agriculture and colonization conducted an exhaustive examination of the fluid milk trade throughout the dominion. It was an extended investigation; there are some thousand pages of the report. It was pointed out at that time that the fluid milk trade operates mainly within the boundaries of the provinces and is therefore under provincial control, but there is a recommendation in the report which I think should be of interest to parliament at this time. It is this:
Your committee recommends that tribunals should be set up vested with authority to settle differences between producers' and distributors' organizations and, if necessary, to fix the returns to the producers and the prices charged the consumer.
Following that, some six provinces set up boards to exercise supervision over the fluid milk trade, and I am sure everyone will agree that the results have been very beneficial indeed. I know at least that in Ontario, with which I am better acquainted than with any other part of the dominion, higher prices to farmer producers were obtained than could have been realized otherwise. The price to the farmer has been stabilized and he has been given some feeling of security by these boards which have been set up.
Let me go a little further. Ten years ago there was set up a royal commission on price spreads. That commission made an extensive study of all phases of the live stock industry, and the report makes very interesting reading. It investigated the production, the collection, the processing and the marketing of live stock products of all kinds.
Its conclusions were clear-cut and were given somewhat in detail. I believe that conditions to-day would be somewhat similar if it were not for the war years and for the fact that we have boards set up already which, as I have already remarked, I assume will go out of existence when the War Measures Act is repealed.
One paragraph of the report was devoted to the stockyards and the public markets. The chief criticism which was offered in the report was the lack of competitive buying in the yards. In the early history of the stockyards there were many buyers on the market, but as the years went by the numbers grew less and less; many of the smaller packing plants were eliminated, either by mergers or by absorption in bigger plants; and then there was the other question of direct shipment, with which I shall deal in a few moments. The report also states that there was evidence of arrangements between buyers. One sentence in that report has special significance and a particular bearing on the commission now under discussion. It is this:
When many competing sellers are faced by few buyers who act in concert or who tacitly agree to follow the lead of larger buyers, exploitation becomes possible.
This is true to-day as it was in those days.
Another paragraph deals with the retailing of meat products by stores. Chain store activities came in for criticism because of the use of "loss leaders" and inequalities in prices. Then the matter of direct shipments was dealt with, and a recommendation was made by the commission which I wish to read; it is very short:
Direct shipments of live stock should be subject to the same rules of weighing, grading, publication of prices, deliveries, and supervision, as shipments to the public stockyards.
I believe that if that were done by the live stock commission it would very nearly meet the ideas of the hon. member who introduced this motion. It also urged that strict supervision of the export trade should be undertaken. One could mention at some length other features which were discussed and recited as proof of the need of greater supervision of the whole live stock trade. Their recommendations, as I have said, were clear and concise. It will only take a moment or two to read what they have to say in their final recommendation which was brought down late in the year 1935:
As a step toward the solution of some at least of the problems which we have outlined, we recommend the establishment of a live stock board, under appropriate jurisdiction.
The duties of the board should include, among others, the following:
(a) The prompt dissemination of information to producers and the trade generally, in respect to production, marketing, stocks, and prices, both export and domestic.
(b) Administrative jurisdiction in matters connected with all phases of live stock marketing and in connection with disputes between producers, processors, etc.
(c) Licensing and supervision of truckers, dealers and export packers; where necessary in cooperation with provincial authorities;
(d) Adequate inspection of all marketing stages and action to correct abuses;
(e) Cooperation with producers, processors and the trade generally, to ensure as far as possible a balance between production and available markets;
(f) To encourage the organization of producers of live stock for regular and orderly marketing;
(g) Improvement of quality of all live stock;
(h) The formation of a uniform policy on external marketing, with a view not only to promoting new, but also retaining and developing, existing markets.
(i) The stabilization of supplies, and the regulation of quality to each particular market;
(j) The utilization of all available means to secure fair returns to the primary producers of good stock.
The powers that the board should have under these recommendations coincide very well indeed with these powers which were outlined by the hon. member who brought this resolution into the house. This recommendation is very definite. It is strictly in line with the pronouncement made by the leader of my party (Mr. Bracken) in his Lethbridge speech, and having been a member of the royal commission on price spreads. I agree with that report and its recommendations. I have always thought since that it would be in the interests of the live stock industry at large.
One more matter. The live stock industry is now faced with a very serious situation. If the threatened strike of packing house workers materializes, the effect on the live stock industry in this season of heavy shipments will be disastrous. I was surprised yesterday when the Minister of Agriculture (Mr. Gardiner), in reply to a question on the orders of the day, stated that the government could do nothing about the matter.
Subtopic: PROPOSED ESTABLISHMENT OF BOARD OF COMMISSIONERS FOR REGULATION AND CONTROL