For a couple of years now we have been waiting for him to introduce policies that would benefit the industry. I am sure most members of this house who represent rural areas cannot but be impressed by the apprehension one finds among farmers. They do not know what the prospects for the coming year are. There is uncertainty about prices; there is even more uncertainty about markets. Added to this there has been a tremendous increase in agricultural costs since the present government took office. According to the figures put out by the Dominion Bureau of Statistics the increase in the index of farmers' costs has continued to take place at an alarming rate. I should like to put on record some figures relating to this increase.
[DOT] (9:40 p.m.)
In the year 1960, four years before the change of government, the index stood at 272.7. By 1963 it had risen slightly to 298.6. But from that point on, when the present government took office, a dramatic increase began. From 298.6 it has risen to 367.5, an increase of 69 points in four years-and about 40 of these points have accumulated in the last two years.
There is apprehension because this government has shown no initiative in the marketing of Canadian grain and because it had permitted prices to drop to levels which pose a serious problem to farmers in western Canada. The minister is found of quoting income figures. I note that he quoted either gross income figures or net income figures. These do not give a true picture of real farm income, which is related more closely to net realized income. The net income figures which the minister quoted and which seemed to show a remarkable increase in farm incomes take into consideration an accumulation of inventory. A farmer may not have been able to sell a bushel of wheat, as is the case this year, yet net income figures will show a substantial net income. In 1961, for example when the peak of the drought had been experienced, the carry-over on western farms amounted to something like 607 million bushels. It had dropped to about 391 million bushels by 1962. The net income shown for that year was $362 million, yet the real net income because of the change of inventory
March 26, 1968
was $670 million, a considerable increase over the net income figures the minister likes to quote. If the minister puts figures on record purporting to show the real income position of farmers he should use realized net income rather than net income figures alone.
The minister went on to accuse us on this side of opposing an increase in the minimum and maximum levels of wheat prices because we had criticized the government for its part in the lapse of the international wheat agreement. What nonsense. We have suggested on this side that those prices could have been increased under the old agreement. I am not saying the new agreement is not just as good as the old international wheat agreement, but there was no need to allow the agreement to lapse so that there was no protection for farmers during that period. Immediately after the announcement was made that the old agreement was to expire, prices began to fall. If there was ever any doubt in the minds of anyone in this country as to the value of an international commodity agreement, it must surely have been dissipated as a result of the experiences of the past year.
To suggest that we were somehow or other opposed to an increase in the price of wheat is an indication of the type of tactics the minister follows in this house when dealing with legitimate questions raised by members of the opposition. The minister went on to say as reported on page 7316 of Hansard for March 5:
I think this is very unfair criticism of the Canadian officials who carried on the negotiations-
He was speaking of the Kennedy round negotiations.
The ministers attended at the conclusion of the Kennedy round and claimed very little credit for the great success the Canadian negotiators achieved.
The minister's tactic was to slough oft his responsibilities on the negotiators, on the officials of the department who represented Canada during the Kennedy round, trying to convince the house that in some magic way he and his colleagues were absolved of their responsibilities and that the officials were the ones to blame, if indeed there was to be any blame. This was the attitude of the government when it took over, as far as the Canadian Wheat Board was concerned.
The present Minister of Finance fell over himself in his attempts to deprecate a former minister of agriculture, my hon. friend from Qu'Appelle, for having taken some responsibility for the selling of wheat during the period he was minister. The hon. gentleman said 27053-510
the present government intended to let the wheat board take the credit for such things. Well, they let the wheat board take the credit, but they have also let it shoulder all the blame-blame which rightly belongs to them for failing to maintain price levels. No amount of sneaking and snivelling on the part of the minister can change this fact.
[DOT] (9:50 p.m.)
With regard to dairy policy I am as convinced as the hon. member for Timiskaming that it is a deliberate and calculated policy on the part of the government to eliminate as many farmers as possible. Somehow or other members of the government have listened to economists who preach the doctrine of bigness, and they believe that by reducing the number of farmers the same amount of income will be divided among fewer people and therefore the whole problem will be resolved. But it does not work out this way. In spite of the fact that there are fewer farmers, their net income is being reduced.
How far does one go? At what point do you reach a farm of sufficient size to be economic enough to produce an income capable of maintaining a farmer on the land? What has been the experience on some of the bigger farms in both Canada and the United States? In fact some of the millionaires who own farms in the United States and Canada have shown losses. If they cannot show a profit I do not know who can, because they have the wherewithall to equip themselves with the type of machinery and to pay for the inputs that are necessary for proper, maximum production.
The doctrine that bigness is the answer to the farm problem must be destroyed before it destroys every farmer in the country. Recently the firm of Hedland and Menzies, which has been conducting a number of agricultural surveys throughout the country, undertook one for the county of Vulcan in Alberta. The purpose of the study was to determine whether or not increased acreage would result in increased income and productivity. The result showed that this was not the fact, that once you reached a certain point the net income levelled off and no matter how much bigger the farm grew beyond that point there was no appreciable increase in the net income. The conclusion was that an increase in productivity rather than an increase in farm size would be the better way of increasing a farmer's net return.
March 26, 1968
Supp ly-A griculture
In my view there is no point in considering transfer of capital into agriculture in order to increase gross income unless measures are taken to ensure that farm costs are not going to rise to the point where there is no net income left for the farmer. Since the present government took office farm costs have been rising at a much faster rate than farm income. The government has set up commissions to study the question of farm machinery prices and farm costs. Undoubtedly those studies are necessary because obviously members of the government do not have any ideas of their own. They have also set up a task for us to determine agricultural policy. I suppose that is necessary for the same reason, but time is running out on them.
On the prairies we are again in the midst of a drought cycle. Last year there was a serious drought, and a very serious depletion of subsoil moisture. If there is a recurrence of the very minimal rainfall that fell last year there will be almost total failure in various areas of the prairies. At present farmers are very reluctant to buy fertilizer because of the great risk involved this year due to the lack of moisture.
Farmers are very reluctant to undertake the inputs that they normally undertake in order to achieve maximum production, because of the risks that are involved. They are also reluctant to take a chance that the government will be able to sell their product once they have produced it. As I said when I began my remarks, Mr. Chairman, I have never known more apprehension on the part of farmers than I have found this year. Unless something is done, and done very soon, it is going to be reflected in a very substantial decrease in the number of farmers in this country, and in a greater problem in finding something whereby farmers can earn a living. The government has shown no initiative and no responsibility in dealing with this problem.