Mr. Chairman, the point the minister made a moment ago in criticizing the amendment moved by the hon. member for Kindersley is precisely the point we are trying to make. There should be some clear definition of what the minister means and of what is involved in the expression "cost of production". The definition given is certainly a logical one, and it could not be interpreted in any other way. The point I should like to make is that when the minister makes a statement that he is prepared to consider or take into account cost of production he is, in effect, doing something which seems to me almost impossible to carry out. I say that as one who has some knowledge of the United States program with regard to cost of production. That is why we in this group have been very critical of any kind of program directed toward helping the agricultural industry which is based on the theory of supply and demand. We have advocated parity prices for the very reason that under such a system you can take cost of production into consideration.
Does the minister mean he is going to say to every producer of wheat, for instance- when wheat is taken under this scheme; and this example applies to other products too- that we are going to consider that every
[Mr. Johnson (Kindersley) .1
farmer who grows wheat should receive his cost of production? If he does he will never sell that idea to the consumers of this country, because it is completely unrealistic.
I should like to give the committee a concrete example. I grow wheat in what is called the Carrot valley of northern Saskatchewan. From an economic view the operation is completely inefficient. My hon. friend from Kindersley can and does produce the highest quality of wheat grown anywhere in the world, and he carries on that operation more efficiently than, possibly, could be done in any other part of Canada. My costs of production are way out of line compared with his, and if you are going to say to me; we are going to subsidize you; we are going to penalize the consumers of this country and the taxpayers of this country to the extent that we are going to give you your cost of production, then I say that the whole proposition is completely unrealistic.
What has been done in the United States to overcome this problem? They have approached it in this way. There are certain designated areas; a wheat belt, a corn belt, a cotton belt, a soya bean belt, a tobacco belt and so forth, and within these narrow areas they set the price so that an economical producer can receive a payment which will give him his cost of production. Anyone outside these areas is free to grow any product he likes, but he must take his chance, because his cost of production is likely to be higher and, therefore, he must make up his own mind as to the economic feasibility of growing the crop.
I say to the minister that he is going out on a limb if he is going to make it clear to the farmers of Canada that regardless of where they live they are going to get their cost of production. I do not think it is reasonable, and I do not think it is realistic. In the area of the United States that is designated as a wheat belt there is set up a great catalogue of items which are considered as being part of the farmers' cost of production, that is, the things he buys which go into his operation. Every three months these items are reviewed, and if the cost of them has changed, the changes are included in the calculation of the cost of production and are related to the price the farmer gets. That is one of the reasons we have advocated parity prices rather than a price based on the theory of supply and demand.
A little later on I may have the opportunity of saying something further in this regard, but at the moment I think the amendment which has been moved is a logical amendment. We should certainly like to have the minister clarify his views on this matter and state
Agricultural Products-Price Stabilization
more clearly what the terms of reference to the committee will be in setting up this formula embodying cost of production.
Subtopic: MEASURE TO PROVIDE GUARANTEED PRICES FOR CERTAIN COMMODITIES, ETC.