The discussion on these estimates so far has 'been of a general character, and before we proceed to deal with dairying in particular I should like to make a few remarks with regard to agriculture in general.
The problem of the farmer to-day is not one of production; it is purely an economic problem. For years he has been told that if he would produce quality products he would not need to bother about economics, that the price he would receive would give him a sufficient return. To-day no matter what may be the quality of the product he produces in
any of the basic lines, that is, grain, cattle, hogs or dairy products, his product is selling at less than the cost of production.
To-day the farmers sell as unorganized individuals to a highly organized world, and they buy as unorganized individuals from a highly organized world. The aim of the Department of Agriculture should be to organize our farmers so that they may combine their buying and selling powers. One of the purposes for which our economics branch was established was to assist in organizing the farmers for cooperative effort, and in the estimates this year I find that the economics branch receives a grant of only S8.600 out of a total agricultural grant of $6,600,000, though the main problem of the farmer is essentially economic. The work of this branch, instead of being curtailed by a cut of $3,400, should be greatly increased. If there are any experts in Canada who can assist the farmers in organizing themselves in order to get a better price for their products or to buy to better advantage, certainly we should spend enough money under this vote to secure the services of those experts for the benfit of the farmers of Canada. No greater service could be rendered at this time.
The farmers are in the very difficult position to-day of paying higher interest rates and carrying higher per capita overhead charges, comparing tire net value of their product, than any other class in Canada. The farmer suffers from high taxation and a low valuation of his products, and he is under the handicap of producing crops which are dependent upon the weather. There is no limit to the competition the farmer must meet. The immigration policy of all governments in the past has been the bringing into Canada of more farmers to compete with those already here. In many cases to-day the farmer remains on his land through the grace of the mortgagee, the tax collector or the landlord. So long as he is allowed to stay on the land he can probably provide food for himself and his family, but in many cases he is not able to provide clothing, and we all know that it is not safe to travel around Canada to-day without some clothes. The farmer sells at wholesale prices and buys at retail. There has always been too much disparity between wholesale and retail price levels. But during the depression of the last three years this disparity has been greatly increased until today he finds himself in an impossible position. The price index figure of field crops, according to information which I have secured from the Bureau of Statistics, has dropped 64 points since 1928, and as compared with this, retail 41761-182J
prices, not including rents and services, have dropped 14 points; and this drop has been mostly in foodstuffs. I should like to point out, particularly to the hon. member for Wey-burn (Mr. Young), who always says that if we increase commodity price levels we shall increase the cost of living in proportion, that the drop in farm commodity prices has been 64 per cent, while the drop in retail prices,' that is to say, prices over the retail counter, when the farmer buys goods to support himself and his family, has been 14 per cent. Conversely, it would be possible to raise commodity prices by 40 per cent without increasing retail prices even 10 per cent.
The farmer's debts and his interest charges are fixed in terms of dollars, and he can pay only by means of the production and sale of commodities, so that at the present price levels the burden of his debt has been doubled or trebled. There is only one solution for the farmer's problem to-day, and that is to raise price levels. If this is not done, then his debts must be wiped out either in whole or in part. There is no use quibbling about that.
The farmer labours under another difficulty in that he sells at world prices or free trade prioes, while he buys at protected prices. The price of everything that the farmer produces to-day is on an export basis; that is to say, the price which the farmer receives is fixed by the price which our commodities will bring in England, less cost of transportation, less commission charges, less handling charges and less advertising costs. The net return which the farmer gets after all these are paid fixes his selling price. If he wishes to bring back some goods from England in exchange for his products, he must pay high tariff charges, excise tax, sales tax and dumping duty, owing to the fact that the Department of Customs at the present time values the English pound for duty purposes at $4.40. The farmer is labouring under this distinct handicap, that the prices of all his products whether consumed here or abroad are fixed by whait they will bring in England. To-day we can get for the British pound, for which our products are sold, only $4.10. Whatever other measures may be necessary to relieve the farmer of his present difficulties, the first remedy should be to bring the Canadian dollar to par with the British pound. Make the British pound worth $4.87 in Canada. Surely the old British pound is good enough for Canada to tie her currency to. Indeed, that is not a high enough rate to enable us to meet the 'competition of the Argentine and Australia in a fair manner, but it would enhance by 18 per cent the prices
long enough. It is time that provincial governments and municipalities and corporations should pay the price for exchange which it would naturally fetch in a free market.
The financial stability of Canada is bound up with the financial stability of the farmer- his solvency. To-day our farmers as a class are insolvent. Solvency can be restored by increasing the price of farm products, and that is the only way. I think there is no question of where Canada's interest lies in this matter. I desire to say again that we can have a 40 per cent increase-perhaps I had better not urge 40 per cent; it may scare some hon. members-we can have a 30 per cent increase in the price of agricultural products without increasing the cost of living of the people of , Canada by more than 5 per cent. I noticed in a magazine last night that Mr. J. M. Keynes, the prominent economist in England, stated there has been a reduction iin the cost of living in England since September, although the British pound is about 30 per cent below par. We can have a depreciation of another 20 per cent, I believe, without increasing the cost of living one per cent in Canada. If living costs did increase 5 per cent in Canada no one would be hurt. The drop ,in the cost of living which has occurred here has been almost altogether in food, and the farmer has been left in the impossible position, to use a slang expression, of "holding the bag" for everybody else. And the result has become apparent in other walks of life. Not only are our financial institutions beginning to feel the situation very keenly, but we have one-fifth of our population unemployed and the other four-fifths have to keep them in idleness. The best way to start ourselves out of this depression is to allow our dollar to depreciate to the same extent as the British pound. We cannot carry on with any higher level.