October 21, 1957 (23rd Parliament, 1st Session)

PC

Warner Herbert Jorgenson

Progressive Conservative

Mr. Jorgenson:

Mr. Speaker, when the house arose at six o'clock I was saying that this government could not allow the economic and social plant of our farmers to wither, for to do so would be to endanger the cultural and economic growth of Canada.
I do not wish to labour these points, but I do wish to make it clear that in my view there is an even higher claim than the claim of equity for agriculture which should dictate our policies here, and that is the claim that only in a truly secure and stable agriculture can the continuing growth of a great nation be assured.
Food surpluses, and especially wheat surpluses are very much discussed today. The system of cash advances on farm-stored grain that is being proposed to this assembly will take much of the sting from this surplus situation. And I believe that the long-run policies of this government and a measure of true leadership in agriculture will finally deal with this problem.
It is roundly predicted that some shift out of wheat acreage will serve merely to remove our surplus problem to other farm products. In part this may prove to be true. But I am quite satisfied that the problem of surpluses will never be solved without an effort, and if it does result in the need for some adjustments I am sure they can be made.
But surpluses are not a problem in all parts of Canada or, indeed, in all sections of the

The Address-Mr. Jorgenson prairie provinces. The one thing that farmers have in common across Canada is high production costs. Production costs are high only relatively to the prices of the products that a farmer has to sell. As far as the man on the land is concerned, this can be attacked from either end-prices can go up or production costs can come down. But as long as both continue at their present level the farmer is squeezed, and squeezed almost beyond economic endurance.
It should be clear by now that agriculture in this country has never been a prosperous industry. There have been short bursts of relative prosperity. For a short interval at the end of world war I the relationship of costs and returns was favourable to the farmer. After the end of world war II and especially around 1951, on the prairies at least, we knew a brief respite from economic pressure on our farms. But let us make no mistake: the normal destiny of a farmer in Canada is to know more of depression than of prosperity.
We have perhaps been prone to assume that this is inevitable. Certainly policies that now exist do not grapple with the fundamental sickness of the farm economy. Indeed one of the primary reasons we are in power as a government and the previous government is not is because the problem of the farmer has not been dealt with.
Why has it never been resolved? I believe I would be safe in saying that it has never really been confronted. It has never been grappled with because, in the counsels of government, the consumer point of view- the view that food should be cheap-has prevailed. The hard fact is that the people of Canada are buying their food for less than the cost of production; the people of Canada are being subsidized by the farmers of Canada, the one economic group that is least able to afford to subsidize anyone.
Where is this money for the subsidization of the consuming public coming from? Farmers are borrowing it from the brief spurt of prosperity they enjoyed in the early 1950's. For a short period farmers were able to invest rather heavily in capital goods. Indeed it was essential that they should replace the worn out machinery of the 1930's and during the war years and since millions of dollars have been invested in machinery alone. Now this investment has slumped; farmers are not purchasing capital goods to the same extent, nor are they setting money aside in a depreciation account to replace the machinery as it wears out.
Farmers are wearing out their capital assets without arranging for a capital fund to equal the wear, a process which the economists

would refer to as net disinvestment. Their farms, in effect, are becoming worth less. And they are doing this, unwittingly and unwillingly, in order that they may subsidize the Canadian consumers.
Is such a situation desirable? A case could be made in its favour; in my view it would be a false case, but there are those who might sincerely support it. The fact is that cheap food is a benefit to 85 per cent of the people in Canada, the non-farming public. I can very well see that a consumers' point of view might prevail; and I can certainly see where powerful production forces might well think it desirable from an economic viewpoint that food for the immense labour force in Canada should be cheap. In the final analysis, cheap food presumably means that the earnings of labour will go further in providing a decent standard of living, and the cost of production of many goods may be reduced.
The gain to the economy when that gain is based on a low standard of living for the farmers in the economy is an entirely false gain. The farmers cannot be expected to underwrite the prosperity of the nation; if we must have cheap food then it must be by design, not by exploitation.
Under a laissez faire government, the standard of living of the farm community will for most of the time be low. This lesson has been harshly learned in the past half century in Canada. The competitive position of agriculture is weak. There is free competition between farm producers. Farmers are numerically weak and small in number. I believe it can be categorically stated that if the government stands idly by the relative position of the farmer will deteriorate further rather than improve.
What, then, is the solution to the difficult and pressing needs of the farmers. The solution, ultimately, must be government intervention

policies that will weigh the economy slightly in the farmers' favour, that will correct the imbalance that now exists and equate the real farm income position with the income of other segments of our prosperous economy. Thinking will have to be in terms of short-run policies and long-run policies.
At the moment the need for cash in the farm communities is critical. I would hesitate to suggest that the net income position of the western farmer is worse than that of the eastern farmer, but the western farmer has been unable to convert a substantial part of his net income into cash income. In other words, bins are flooding with unsold grain. The cash advance policy that this government has introduced will convert, at least, part of

this net income into cash, and in this way the western farmer, in terms of spendable income, will be brought to a position parallel with that of farmers in other parts of Canada.
That is a short-run policy for the western prairie producer. But agriculture across Canada is in a strained position, and, as I have pointed out, farmers are subsidizing the remainder of the consuming public. I am confident that no consumer in Toronto or Vancouver, in Winnipeg or in Montreal, in Edmonton or in Halifax would knowingly visit a low standard of living upon the men and women who produce their milk and their bread, their butter and their eggs. They sincerely fail to realize that the price they pay falls short of covering the cost of producing this food. If they ever came to realize it fully I am sure they would willingly pay the real costs.
I believe price supports must be raised to the point that will, in the short run, give a farmer the cost of producing the food he sells, plus a reasonable return. I think that if this is done with adequate explanation to the consuming public they will agree that it is just.
Grains are, of course, a special case. A minimum floor price-the initial payment- must be maintained. But when we come to the perishable foods that are consumed primarily upon the domestic market, then clearly the full production cost must be met.
Hon. members may tell me that we will arrive at incentive prices; that great surpluses will appear in meat and butter and the other alternatives to the small grains. To this I can only reply that we must put our salesmen out and try to sell our production and try to find new uses for our land in the growing of new crops and produce and the selling of as diverse a package as is humanly possible. If in spite of all this some surpluses do appear we will have to deal with the problems as they arise.
We have problems now. The problems that some already visualize will simply be of another form and, presumably, will be at least as susceptible to solution as the difficulties that now exist with regard to small grains.
I also think I should point out that an increase in the production of livestock anywhere in Canada would be made at the expense of the small grains. Land resources are limited, and increased herds of cattle or hogs, or bigger flocks of sheep or poultry anywhere in Canada would be made at the expense of prairie wheat acres. So although we might face some possibility of an increase
The Address-Mr. Jorgenson in supplies of some of the protective foods, it would almost inevitably be made at the expense of some wheat acres.
The longer term policies for agriculture are the great challenge. May I quote from an article written by Mr. Ralph Hedlin, an agricultural economist which appeared in a recent issue of The Country Guide, a statement which I think sums up the needs of our industry:
Agriculture can never be legislated or subsidized into a position of secure economic equality, at least without fundamental changes in the national farm plan and in national consumer attitudes. In the long run, the land in Canada must produce the food that is wanted by the people of Canada, and the people of Canada must be prepared to pay a reasonable price for it.
Consumers must be prepared to pay a reasonable price for farm products, a price which at the same time will be economic. But farmers must be in a position where they can hold down the cost of producing through the use of the most effective and modem devices. At the moment many of us cannot use such devices because we lack the essential capital.
In the short run we need income assistance, but in the long run we need reasonable prices, good markets and capital resources that will permit us to help ourselves. In the interim this will mean creative government policies and assistance.
I do not propose today to deal with the long-term policies in exhaustive detail because I hope opportunities may exist for further discussion at a later date. However, I do wish to outline some of the policies that are of first importance.
A realistic credit policy is a pressing need. A program of the general type of the Veterans' Land Act would be of great assistance to Canadian farmers. I do not believe I am giving credit where it is not due when I say that this program has been eminently successful. It has provided the farmer with a qualified consultative service on his production problems and the organizing of his farm enterprises and has also provided him with the capital at reasonable interest rates for making his new projects efficient. An extensive credit program along these lines would be of immense value to Canadian agriculture.
Crop insurance should be examined in detail. Price supports will provide income for those who produce but an actuarially sound crop insurance program would meet the critical needs of those who through no fault of their own suffer a crop failure. Many such people find themselves in the position of needing relief. I believe that a well qualified royal commission should be named to

The Address-Mr. Jorgenson quickly and completely examine the economic possibilities of starting a farm production insurance program, perhaps initially with modest coverage and on a modest scale. With even modest assistance to production and prices the destitution prevalent in the agricultural industry today could be alleviated and perhaps eventually avoided.
Marketing research should also be increased. It is my earnest hope that when the commission on price spreads is named it will have something of value to say on this subject. Admittedly marketing research is not directly related to price spreads as such but the whole question of farm marketing might fall under their scrutiny; this certainly would be my hope.
This government must also consider new markets and new products. If necessary the agricultural attaches at our embassies should be increased in number and markets for our farm products should be sought in the four corners of the world. If we find any new markets for products that we do not grow, our market specialists and researchers should co-operate to devise strains that can be grown in Canada and marketed from our farms at advantageous prices.
This government should co-operate closely with extension agencies in the provinces. I fully realize that extension is under the authority of the provinces according to the provisions of the British North America Act but we can at least co-operate in helping farmers to combine their undertakings more effectively.
One point which should have been clear long ago is that a really effective farm extension policy will have to wait for the organization of larger local units of administration in a number of the provinces. In Manitoba and in Saskatchewan, for example, we have small nine-township municipalities. It is too small an area for most types of administration and much too small for the proper organization at the local level of a really effective farm program.
There are many points with which I have not dealt in any detail, if at all. Producermarketing boards should receive every encouragement from the government. Agricultural research and agricultural education are vital and co-operation with the provinces in these fields should be invited. The annual farm conference should be a real planning conference and farm leaders should return from it fully conversant with the production needs of their industry. Farm leaders and farm organizations both should be invited to co-operate with the government in designing farsighted policies.

The farm industry is essential to the health of this nation. It is not healthy itself at this time and therefore cannot transmit to the rest of the nation that which it lacks. I ask nothing for agriculture that I do not think is vital to the continued well-being of the entire nation. We cannot build a strong economy on a weak foundation. Agriculture is one of the cornerstones of our economy. A powerful structure cannot be built upon an ailing cornerstone.
The needs of agriculture should be of concern to every person in this country. I am not pleading only for the agriculturists of Canada, I am pleading for the well-being of the entire nation; therefore I say a farm policy which accomplishes the relative prosperity of our farm community is one of the really pressing needs of Canada and one of the grave responsibilities of this government.

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