Mr. Lambert (Bellechasse):
Mr. Chairman, we are discussing the farm problem which is extremely serious, because farming is a basic industry, not only in Quebec but also in the whole country.
I have listened with a great deal of attention to the remarks of the hon. members from other parts of our country, and I have come to the conclusion that the farm problem exists all across Canada. I cannot understand that, in the case of an industry as important as agriculture, ways cannot be found to solve a problem which is of concern not only to the farmers but also to the whole people.
The farmer's returns are inadequate as compared to the number of hours he has to devote to his work during the production cycle and as compared to his invested capital. That is why he often has to resort to borrowing in an effort to improve his production capacity. The government probably thought that by making his credit facilities easier at reasonable interest rates, he would be able to improve his position and to stabilize his enterprise.
Various problems prevent the farmer from developing his operation, putting it on an economic basic in all respects and getting from it a stable income. The main problem is that of prices because the farmer never knows what to expect in that sector.
The farmer never knows beforehand, except for a few products, what price he will get when he puts his production on the market. That is what happened last year to hog producers, for instance, and to egg producers who had to put their products on the market at a price lower than the production cost. That was not the way to increase their income, allow them to become financially independent and survive in a normal way.
What would happen to a manufacturer, for instance, if at the other end of the production line in his plant the price offered for his product was lower than his production cost? He certainly could not stay in business very long, he would go bankrupt. That is the situation in which agriculture finds itself in our country. It is likely that no one wants to call it bankruptcy but everyone is complaining that agriculture is in a very precarious situation.
DEBATES October 3, 1968
Among the obstacles which also prevent the farmer from getting a foothold, from surviving in a normal and advantageous way, there is the weather over which no one has any control.
The farmer is faced with those difficulties. He sometimes suffers heavy losses due to excessive rain, drought or insects which destroy the seeds and prevent him from getting something for his work. I know that neither the government nor the farmer can do something in that field. However, it seems to me that such drawbacks are quite enough, without us having to bear on top of that the ups and downs of an unstable market as far as prices are concerned.
I wonder whether a generous increase in the farmers' borrowing opportunities would settle their problem or whether it would be to the sole advantage of lenders who expect a higher rate of interest. Would this rise in the rate of interest be profitable to the farmer, or rather to financing institutions making the loans?
Another factor which prevents the farmer from bearing the expenses which a normal development of his business entails, is the cost of farming machinery. The problem by far exceeds the limits of a given milieu. Farm equipment sells at a very high price and the manufacturers do not always take into account the eastern or the western agriculture, in their manufacturing.
Some spare parts are sold at an excessively high price, absorbing a large part of the farmers' income because, very often the spare parts cannot be readily adapted to the various kinds of equipment bought in Canada.
[DOT] (4:40 p.m.)
In order to lower the production cost of farm machinery, it might be a good idea to encourage the setting up of strong Canadian industries in Canada that could manufacture equipment suitable to our needs, as well as spare parts which could be used as equipment of different trademarks without too much inconvenience.
Mr. Chairman, I may be drifting away from the subject but I shall come back to it. I am not too keen about this measure, because it does not really meet the needs of agriculture in eastern Canada. The agricultural economy of Quebec has always been centered on the dairy industry. An increase in the size of farms and of dairy herds is offered as a solution. I am convinced of one thing: in the province of Quebec the dairy industry has.
October 3, 1968
been, remains and will remain for a long time, the basic industry in our agriculture.
However, the increasing number of milk cows, each year, in Quebec and the decreasing number in Ontario shows that the dairy livestock is also decreasing in the other provinces. This gives Quebec the first place in Canada as far as the dairy industry is concerned.
We have 38 per cent of the whole dairy livestock, and milk production of Quebec represents 35 per cent of our Canadian production.
In 1966, Quebec farms produced 6,500 million pounds of milk bringing $224 million to the producers. That is not enough to remedy the situation, and it would be necessary to increase prices in order to raise the revenue of dairy producers.
Price support should be increased on a continuing basis, always taking into account prices, costs and production.
Consumers, hearing a farmer talk about the increase in price support, will perhaps think, and quite rightly, that if the government complies with our request, consumer prices may go up.
However, the Creditistes submitted during the election campaign a proposal which would allow the government to satisfy both the producers and the consumers by using the Bank of Canada to advance the necessary credit to the Canadian Dairy Commission. This commission would then grant the necessary subsidies to the dairy producers, which would allow them to get a reasonable price for their products and have a decent income which would make it possible for them to expand their operations as much as reasonably possible.
Mr. Chairman, I am in favour of the enlargement of farms. We have been practising it in our area for a certain number of years. We are also in favour of increased herds of milch-cows, in order to have profitable family businesses which can survive. Then, our sons will be truly interested in the survival of our agriculture for the advantage of the Canadian community and the French-Canadian community.
But by experience, Mr. Chairman, I know that a given moment, one cannot go over a certain limit, because if the size of the farm is unduly extended, we will have to resort to outside labour and this would be quite costly. It would contribute also to increasing the cost of production and, finally, it would reduce
Farm Improvement Loans Act the net income, so that the situation would not be improved.
There is also some uncertainty with regard to the policies of the federal and the provincial governments. The federal government has a word to say in the field of agriculture, through its legislation on the international market, etc., and the provinces also have some responsibilities. But it often happens that when a farmer goes to the government, either federal or provincial, to ask for help, he gets the following answer: "Go to the provincial government, this does not concern us," or "Go to the federal government, this does not concern us." And so they pass the buck, while the farmer waits, suffers and, in the meantime, the situation grows worse. That is why the agricultural situation will continue to deteriorate, unless an agreement is reached and the responsibilities of the federal and the provincial governments in the field of agriculture are clearly defined.
Incidentally, allow me to make a suggestion: there is a lot of talk about a new constitution, etc.; but where agriculture is concerned, when a new constitution is drafted, I should like the situation to be taken into account, and an attempt made to correct it, by defining exactly what responsibilities belong to the federal government and to the provinces in the field of agriculture, so that one might know where to look in our society.
Mr. Chairman, before bringing my remarks to a close, allow me to draw the attention of the house to the resolution before us. There is a huge question mark in my mind. On page 14 of the annual report of the Farm Credit Corporation, one can read the following: FINANCING Farm Credit Act
To finance its lending program during 1967-68, the Corporation borrowed $194.5 million from the Minister of Finance at an average interest rate of 6.16 per cent-
Further on, the result of the difference between the interest rate paid by borrowers and that paid to those who financed the government is given.
Approximately 80 per cent of the funds lent by the Corporation bear the statutory interest rate of 5 per cent. The Corporation borrows funds from the Minister of Finance at current interest rates which are much higher than the average rate the Corporation may charge, thus creating an interest deficit which lasts for the duration of the loan. A continuation of the excess of interest cost rates over interest revenue rates will result in cumulative and rapidly accelerated annual operating losses.
Mr. Chairman, I should like the minister to tell us, while this question is under study,
October 3, 1968
Farm Improvement Loans Act whether there is really a relation between the report of the Farm Credit Corporation and the bill which would allow the cabinet to increase the interest rates on loans granted to farmers.
Mr. Chairman, in a general economic development program we have to take agriculture into account. Agricultural policy must be a part of a general economic policy. The conventional distinction between agriculture and industry tends to conceal or at least to deny the fact that agriculture is itself an industry which, in addition, generates more industrial activity, wealth and jobs. This is why I said at the onset that agricultural industry is an essential industry which affects not only the farmer but the population as a whole.
[DOT] (4:50 p.m.)
We must direct and organize farming in such a way as to integrate it efficiently in the mechanism of modem economy, and more particularly the food industry. Mr. Chairman,
I cannot understand why there is so little concern about an industry which is so important for all the people of the world, since we need from the cradle to the grave the fruits of labour of that industry in order to exist. We need food every day of our lives, and it is in the farming industry that we find it.
How is it, Mr. Chairman, that the land that feeds mankind is not able to provide a living for a man? This land that feeds all human beings in the world is not able to give a decent livelihood to the one that works it for the benefit of the whole population.
We must definitely rid agriculture of its traditional characteristic of being necessarily and indefinitely dependent on the state.
Mr. Chairman, it is getting embarrassing for the farmer, year after year, to keep asking the authorities for a recognition of his rights so that he can survive and develop. We should at least ensure his survival and development permanently.
Mr. Chairman, if one day the situation of agriculture is such that the best farmers do not earn an honest reward, then all will be lost.
The economic nature of modern agriculture compels us to assure for the farmer, in all fairness, the same standard of living, the same economic and social benefits enjoyed by the other citizens engaged in economic activities requiring as much knowledge, capital and work. That must be the social and economic status of the real professional farmer.
[Mr. Lambert (Bellechasse) .1
Mr. Chairman, the farmer is not asking the state and society for a special status or special advantages. In working towards this aim, we should avoid measures and methods of organization which would tend to make the farmer a ward of the state and force us to witness, without being able to do anything about it, the progressive disappearance of initiative, of the right of the farmer to expand and improve his operations according to his means, his skills, his will to succeed, his sense of responsibility and his own efforts. We could lose a great deal.
In short, we should, I agree, give the farmer greater credit facilities but, for heaven's sake, let us not raise the interest rate and let us guarantee the farmer better and more stable prices, so that he may repay his loans without any difficulty.
Let us suppose that a 40 year old farmer borrows $25,000 to improve his farm by purchasing more land.
Topic: FARM IMPROVEMENT LOANS ACT
Subtopic: AMENDMENTS EXTENDING PERIOD. RESPECTING INTEREST RATES, ETC.