Mr. Ross (Souris):
On April 17 the minister was asked a question about Canada's position in view of the remarks of United States officials to the effect that if Britain did not come in the United States could not accede to the present quota. The minister answered on page 4006 of Hansard, and I shall read the last part, the important part of that answer:
In any consideration of the future, we must keep in mind that the British will require 200 million bushels of wheat from the world supply. Whether they purchase it under the agreement price or the class II price does not alter the fact that the United Kingdom will require wheat. I do not think Canada, the United States or Australia would like to commit themselves, within the agreement, to the point where they cannot take care of Britain's needs. I do not know what the agreement will look like. If after the middle of July it is found that Britain has not acceded there will have to be a meeting and a new allocation made. Just what that will be, I do not know.
International Wheat Agreement
Those are the exact words on the subject by the responsible minister and I think they furnish proof of the fact that we will not know what this agreement will mean to us as a great producing nation until after July 15. That was the point I was attempting to make.
There is another disappointing feature and it is the fact that there is no escalator clause to take into account cost of production during the life of the agreement. While the cost of production to the wheat producers was steadily rising, and there was a request from their officials that the increased costs should be taken into account, the Minister of Finance said that it could not be done.
I am sorry that there is no such provision in the present agreement.
Freight rates are one of the greatest factors in production costs of the farmer and they have been increasing. They are added to the cost of goods purchased from manufacturing centres by people on the prairies, for their production. Those same freight rates apply to sales by western producers so they feel those increases on shipments both ways.
The Economic Annalist put out by the Department of Agriculture in April, 1953, points out that since April 7, 1948, there has been a 98 per cent increase in freight rates with the granting of the five various increases during that period. On page 43 of that publication there is, I think, a very enlightening paragraph which reads:
Because of the level of corporation income tax, it takes about two dollars of new rail revenue to provide an additional one dollar net. Moreover some important segments of freight traffic are not subject to the general increases authorized by the board.
That gives you some idea of what this government's heavy taxation is costing farm producers. I know that my good friend the Minister of Agriculture (Mr. Gardiner) will talk in the west about the small percentage of farmers who pay income tax and he will say that they should not be concerned about taxation. However, as taxation enters into the cost of everything used for farm production, that taxation to a very large extent is borne by the farmers in the west, whether they show a profit or not. I think that freight rates are out of all reason and when increases are granted they are not spread over the entire system but the maritime provinces and the western provinces bear a very great burden in those added costs- something which is, in my opinion, very unfair. I think there should have been made in the agreement some stipulation which would take into account the matter of
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International Wheat Agreement increasing costs, because while the farmer's general income is decreasing rather rapidly his costs of production are still increasing and he does not know where those costs will finish.
I realize that the great majority of prairie farmers certainly want the Canadian wheat board marketing system. I have been a continuous supporter of the Canadian wheat board-irrespective of what some of my friends may say. That board was brought into being by the Bennett government in 1935 and the only people who have tried to set it aside are those in the Liberal government. In fact, one of the orders in council which we discussed in the house pretty nearly took the meat out of that board in 1938 and made it non-effective. It is just getting back to operation now.
Despite the figures I have given of the very great cost to wheat producers, I am satisfied that 80 or 90 per cent of them still want an international wheat agreement of some sort. Along with many of those farmers I was very disappointed with the present international agreement; but, as I say, the vast majority of farmers want some sort of international wheat agreement to be arrived at, and I am satisfied that they want to continue with the Canadian wheat board. While I am not at all satisfied with the present agreement I do propose to go along in support of it and I hope it will work out considerably better than I presently foresee. I think it is a real gamble. The other day when we were on the minister's estimates I gave the figures of the wheat held by the people of this country. I think the statistics of the minister's department showed that we have on hand now some 604 million bushels of wheat. I believe that the average over the period 1943 to 1952 was 380 million bushels, so we have a considerable surplus now. We have on hand some 1,160 million bushels of wheat, oats, barley, flax and rye, and those figures indicate a very great surplus except perhaps in the case of flax. Farm producers at this time are very much concerned about their future and I am bound to agree that they have some reason to fear.
I am sorry that things are so indefinite when we are discussing this agreement, and, although the minister has not said anything himself, I had expected that before now he would have announced the initial payments for the crop year, that is on grain produced in 1953. Some days ago I asked the minister about the matter on the orders of the day and his answer was that unsettled conditions made it impossible to announce the price yet. To the extent that they were previously
rMr. Ross (Souris).]
announced, the producers have gauged their acreage and production to some extent based on these initial payments, but I am very sorry that the minister has found it impossible at this date, while people are seeding, to have made an announcement.
Topic: INTERNATIONAL WHEAT AGREEMENT