Manitoba Committee Hansard — 21 February 1975 (LO Committee, Sitting 10, 30th Legislature, 2nd Session)

30-2-lo10

Manitoba — Debates (Hansard)

Legislative Assembly of Manitoba HEARINGS OF THE SPECIAL COMMmEE ON LAND OWNERSHIP Chairman Mr. Harry Shafransky, M.L.A. Con stituency of Radisson Morden - 7:30p.m., Friday, February 21, 1975. Printed by R. S. Evans- Queen's Printer for Province of Manitoba

February 21, 1975 7:30 P,M , MR . CHAIRMAN: Order please , Would the people please be seated ? Mr. Kitching, James Kitching, private presentation. Mr. Kitching, you may proceed. MR . J, KITCHING: Mr. Chairman, ... MR . CHAIRMAN: You may sit down if you wis h. MR . J. KITCHING: I'll stand for this bit if I may and I'll MR . CHAIRMAN: That 's fine , whatever suits you. 51 3 MR . J . KITCHING: I welcome this opportunity to present my views to your recently published paper "In Search of a Land-Use Policy for Manitoba" .

The large number of briefs presented at these hearings indicate that this is a point of major concern to the farmers of Manitoba, The farmers and their organizations have been loud and clear in their expression to date on this topic, and I respectfully suggest that the government should consider what is said at these hearings when formulating new policy.otherwise they are a farce and a waste of time , This brie f is not going to be burdened with charts and statisti cs.

Let me assure you, the Committee, that I do know enough about economics to put together any figures I need to verify the statements I wish to make1but half-truths propped up by figures only detract from positive discussion. There are some examples of such abuse in your published paper and for that reason I will attempt to give my experiences and observations rather than submit to you figures that do not set our problems in proper perspective . I farm in the Carman area. I own some of my land, I rent some of it; it is all continu ously cropped.

It might interest your Committee to know that what the official soil maps of Manitoba classify as the poorer types of soil consist ently yield the number one and number two soil. I want to touch on only four points; The first , rental arrangements ; second, ownership; three, agricultural change; and four, government •s responsibility.

While 30 percent of the farmland is rented.your paper made much of the 1 percent held by people living outside of Canada but failed to look in depth at the 29 percent which I suggest is held in the best possible way--other Canadians, most of them still resident in that very community , owning small blocks and spending their rental money in the community that generates it , A closer look at some of these landlords will reveal that few are wealthy .

A surprising number are young and middle-aged, still owning land that they or their fathers purchased but it failed to support them and their families, and although they sought a more regular income in the work force they've retained ownership of that land as a form of savings and investment . Many other landlords are retired farmers living off their rent and their pensions. These people from my experience make the best possible landlords and this is one vassal -if I may borrow a word from the paper -that has an excellent relationship with his landlords , I•ve rented one parcel of land for 25 years .

It was this rented land that let me establish a viable unit when no economist would have recommended me for a loan . I1m not insecure in my tenure as long as I farm the land well. Similarly, on two other parcels of land while the original leases were written for three years they 've been renewed several times. Your paper points out that in times of agricultural prosperity rents went higher , but it failed to mention that the opposite is also true ; in depressed times rent fell. In 19 69-70, Red River clay was renting at $1 5. 00 per acre, cash; 197 1-72 three to seven dollars was not uncommon.

The landlord was sharing the misfortune of the renter regardless of his investment, I know of no fairer rent for anything than that it be related to its worth . The wide fluctuations that land rents have known over the last 15 years are only an indication of the fluctuating agricultural economy. Would a government lease be that flexible ? A higher percentage of land is rented in the Pembina Triangle . Some farmers opted out of intensive farming and others picked up the challenge .

It's a distinct advantage to be able to rent a portion of your land; it lets the expanding farmer use his capital for equipment and operating . Se condly, it gives a flexibility not common to complete ownership as a farmer may rent some land and then release it when he finds something closer to home or more adapted to his purpose . Throughout this area, I know numerous acreages rented and re rented- a fair degree of change but for the most part harmonious relationships between the lessor and the lessee .

Few of us would have been able to establish our farms were it not for the advantage of renting land, For the aspiring young farmer or the government to put too much emphasis on his ownership of land is to jeopardize his viability .

Chapter IV of the Working Paper deals with changing patterns in agriculture, and I

51 4 February 21, 197 5 (MR. J. KITCffiNG cant•� •• ,believe misinterprets them completely excepting the statistics your paper submits as factual in regard to a farm size changes zone, It would be useful then had your researchers put yourselves in the positions of the various owners and pursued the reasons behind their decisions to change before advancing to policy-making. A number of farms under 200 acres did not decline as significantly as the next group. I venture to suggest that these farmers had off-farm income which possibly produced the greater share of the family earnings.

With the narrow profit of recent years, few grain farms of that size could maintain a family unless it was a specialized unit, and there's been no reference made to anything of that nature to qualify it. But farms in the 200 to 639 acre bracket were un doubtedly full-time operations for the manager but not producing sufficient revenue to support the family, maintain the equipment, and make even modest payments on capital investments. These farmers had to get in and get out if they wanted a decent standard of living, hence a large number of farm size changes.

Much has been written about farm size, the emphasis on acres here, about average age of Canadian farmers, and about starting young men on the land. These are only distantly related to agricultural policy and availability of credit; they are directly and indisputably related to the economic viability of agriculture. Young men are asking agriculture for the same standard of living as any other occupation after a return on their investment,but with $15, 000 combines and $1.4 0 wheat, no young man in his right mind will commit himself to farming even with easier credit and government promises of security.

Subsequently people had to control larger acreages to pay for modern machines and build larger animal units to justify mechanical handling costs of feed and waste. A farmer who has initiative wants to have an efficient farm, wants modern practices, good equipment, and pride in his operation. Farm sizes had to change. Few people make changes when they're comfortable. Necessity forced most of us to expand and to change to modern techniques.

Observe the man who is secure, old or young, and he is reluctant to change, While sociologist and politicians decry the population of the rural west, do they want people tied to the land that won •t support them? Implanting extra voters into a municipality and redividing the gross product does not make that area richer; it does make the people in the community suffer. If the economic climate would permit farmers to establish and prosper on 100 or 200 acres, young people of farm heritage would find the credit and would act.

In the Rural Municipality of Dufferin and the Town of Carman, which is situated in the centre of the municipality, the population change between 1961 and 1973 is a loss of- and the paper reads 299 persons, it should actually read 199 , gentlemen, according to municipal statistics, It•s not a significant change in light of the labour-saving technology which has become available.

But the division of responsibility is different, I don't think it's a serious adjustment that they don •t operate a similar acreage in a s eparate unit, There are managers called farmers, tractor drivers, repair men, fertilizer distributors, truck operators, potato machine operators, carpenters- they all draw their living from the farm - but it's an age of specialized skills just as it is for any other industry. Our town of Carman has three major car garages with 21 persons employed, Would you recommend 21 small garages?

Could each of them afford front end alignment service, transmission service, engine overhaul facilities ?, Some have been forced by economics but some have moved willingly to the kind of work they preferred, The Working Paper submits figures to support the argument that larger farms are less productive, Such is not the case, This is the most progressive farming area in western Canada - that is well documented- but the innovator must have scale to carry new investment.

A study of the Carman Farm Business Association records a few years ago showed that farms of 499 acres and larger were grossing and netting more per acre. Table 27, Page 74 of the Working Paper states that the value of farm product sold per improved acre - I believe this was in 1971 -o n the 1, 120 to 1, 599 acre farms, which is the size of my farm, was 22. 45 per acre. My own farm produced about four times that per acre. Another paper this evening will deal much more elaborately with this and substantiate, I think, to your satisfaction that the reverse of what the Working Paper states is closer to the truth.

I know of no farmer with less than 640 acres who grows corn, potatoes or sugar beets. No one can carry the capital investment on a small acreage. This type of farming generates revenue and jobs. In Manitoba we have optimum conditions but we must not be denied the use of modern machines by restricted acreage. -

February 21, 1975 515 (MR. J. KITCIDNG cont'

d) The price of land is an accurate barometer of the returns from crop production and I•m dist urbed that our government is alarmed that it has risen so sharply. I think they should be cheering. They should be cheering. While outsiders are buying they1re not setting the prices; the neighbours are . The price is set by the second highest bidder . I repeat that. The price is set by the second highest bidder, based on what he thinks it1s worth .

While it sounds attractive to suggest cheap land, cheap machinery, cheap credit, agriculture in Canada can •t be sheltered from the economic environment wit hout serious repercussio ns. The suppliers of inputs must pay comparable wages to non-agricultural industry to have a promise of profit if we are to have service and research. The old fixed rates of returns would quickly drive all capital out of land whether it were rent or interest. Unless the government intends to turn farming into a public utility, in the interests of cheap food, all segments of the industry need a just return for their contribution.

At last Wednesd ay's hearing, and I digress from the script here for a moment, the Minist er suggested that a su bsidized land policy would give cheaper food. I have done some figures to illustrate how land costs contribute to the consumer price of food . You don •t have these figures1gentlem en. One acre of land produces about 1, 000 loaves of bread.which is worth $350 . &moving half of the land value charge of pe rhaps $7. 00, that would be approxi mately 2 percent of the sale value or . 7 cents per loaf of bread. If you want to use potatoes, an acre of potatoes would sell possibly for $1, 000, twelve hundred.

If you removed $7.0 0 or half of the land charge from it you 1d reduce the cost to the consumer of that food produce by 3 1/2 cents on sixty pounds . I suggest it is no more difficult to start farming today than it is to start a feed mill, a service depot, or a retail store . Prices have escalated; in other words, dollars have shrivelled. But it takes no more product to buy a machine today than it ever did. If you want an exercise for one of your economists , consider that a 1937 combine cost $1, 11 0, wheat was 35 cents per bushel.

That combine as opposed to today's $38, 000 model was tractor drawn, no rubber tires, no hydraulic controls, no variable speeds, no cab , no straw chopper, no paint, and required two men to operate it. When I bought land in 196 6 it needed 110 bushels of wheat to pay for one acre. Today that land is worth 65 bushels per acre. I see no reason able way to isolate agriculture and relegate it to a 20 or 30-year old price struct ure without completely artificial and rigid controls.

Artifici ally cheap land or any other subsidy program to guarantee a cheap food, if it assures the farmer of a reasonable profit, will only result in people paying directly or indirectly for the privilege of farming. Familiar t:xamples are the $1, 000 dairy cow complete with quota , the high-priced tobacco land in Ontario , if you acquire the growing rights, British agriculture wit h its highly structured prices is rife with such practices. Las tly, let me be more positive as I comment on government involvement.

Page 10 of the Working Paper says, and I quote: "The critical question is not one of foreign ownership but the effect the various forms of tenure and land transfer have on farmers , community, province and country ." I quite agree. We 1ve talked about consist ency today and this doesn •t quite agree with Page 16 , but we may leave that for the moment. Or maybe for the benefit of the folks who don •t have the paper in front of them I could read from it.

"As can be seen from Table 1 1if non-residents continue to purchase land at the current rate there would be no farm land left in the hands of local farmers in the province after 9 7.1 9 years ." And it goes on. All farm land in the Eastern region would be owned by non-residents after 42 years, the East Central region in 69 years. At the municipal level, Macdonald would be in non resident hands in 29 years , Franklin in 11. 15, St.

Francois Xavier in 5. 37 years ." Again, ownership is not the basic issue, but wit h this I do agree, that Ontario and British Columbia in particular are suffering severe abuse of prime farm land by persons who own it, live on it and by all the standards of your paper are ideal farmers , but they 're turning thousands of acres of the country's finest land into horse pastures, country lawns and otherwise unproduc tive us es. And I, and everyone here, will share with you a common concern that too much agricultural land is going under urban and other development.

Society is going to have to come to grips with this issue . You and your government can do a real service and mark a turning point in our growth if you est ablish fairly and clearly what lands may go under cement, what lands shall be retained for agricultural production and what land shall be preserved for water control or

516 February 21, 1975 (MR. J. KITCIDNG cont'd) ••••• wildlife and recreation. Obviously some people will be unhappy with the final decision but few can quarrel with such a move if present owners of property are compensated by society for what it takes. Your government and others are given a mandate to govern, you have all the power necessary to control,or write new legislation to control, virtually everything in this country. It is not necessary to buy it over or operate it to accomplish that end.

I do not want foreign ownership of land or1for that matter, any Canadian resource, but that does not preclude use of outside capital. It is less than 50 years since many families moved from the United States of America to the Red River Valley. Our neighbourhood has a strong element of people who came from Europe since 1945 and we're a better community because of it, Most of these bought or secured land before they moved in, I suggest it is still happening. When laws are written to prevent undue profits from oil companies and manufactur ing plants moving beyond our border, let them also include agricultural land.

I would not dis criminate against out-of-the-province persons owning land. Gentlemen, I saw no need to elaborate on that, I could have written three paragraphs, but I believe our provincial boundar ies are too heavily drawn for the national interest, and every effort should be made to encour ·· age money and labour and goods to move freely about Canada to the place of greatest need. It is very clear from . precedingheari ngs that the people of Manitoba do not want the government to own the land. I strongly endorse that position. Farm size has to relate to machinery investment.

Farms will become bigger, the demands for capital, for sophisticated machines, for the skilled labour we need to operate them, dictates that. We farmers will need more and more outside capital to operate. FCC is doing an excellent job . So for the most part are the chartered banks. MACC before it withdrew from land loans was also helping. The banks are becoming more in tune with modern agriculture's needs. They develop line of credit financing, cash flow systems and agricultural expertise geared to modern farming. The modern farmer uses credit as one of his tools and may use it all his farming years .

That doesn •t mean he has to live poor. Other industries as they have moved into the industrial age have found it neces sary. You should encourage working Canadians to save and invest. If agriculture is safe for farmers it should be safe for other investors , Land, feedlots, rural processing plants, Western Canadians will need outside capital for a long time to come. Other provinces have set up land use guidelines. I would sugge st, as others have sug gested, that a thorough study be done by impartial and qualified personnel. Then, and only then, should Manitoba draft ownership and use legislation.

Gentlemen, it is very clear from the. preceding hearings that farmers of Manitoba do not want the government to own land. I see no good reason for it, The Working Paper does not substantiate the case . I sincerely urge you to move slowly on the issue under discussion. Respect fully submitted, MR . CHAIRMAN: Thank you, Mr. Kitching, On Page 2, Mr. Kitching , there is one sentence that I think you missed out.

It does not give the meaning quite clearly and just for the benefit of the people who are going to be transcribing, the sentence reads , "The critical question is not one of foreign ownership but what effect the various forms of tenure and land transfer have on farmers, community, province and country. 11 You had missed out a part of it and it did not put the meaning across what you were saying. MR . J. KITCIDNG: Sorry. That's a quote from the book. I1m glad you read that in , MR . CHAIRMAN: Mr. Henderson. MR . HENDE RSON: Mr.

Kitching, I•m very glad to see that at last we•ve had somebody that spoke up fairly well of the landlords that we had in the past, and even landlords that we have now, because it seems like as if there's a group of people think that the government have to own it all the time before you can get a square deal. And I underst and by your operation that you are even leasing some yet, even though you own land , MR . J. KITCIDNG: Yes, I lease a litt le over half of the land I work. MR . HENDERSON: Do you find your landlord difficult to deal with ? MR . J. KITCIDNG: No , Mr.

Henderson, I think this was the point that prompted me to go to the trouble I did of putting this together. I 1ve been awfully happy in my relationship wit h the landlords , I said I•ve rented the one land for 25 years and it has gone from the father to the next generation and our relationship has been fluid and it's been a happy rela tionship; and as I said, two other landlords, equally congenial relationship , even though when I'd win they lose, It's a business arrangement, mostly very congenial, MR .

HENDERSON: Well, have you read the present lease that the government gets the farmer to sign when you lease the land now ? -

February 21, 1975 517 MR . J. KITCHING: Yes, I read it. MR . HENDE RSON : Do you think that it' s a better lease for the farmer than the one you used to have or did you even have one? MR . J . KITCHING: I suspect I1m like most renting farmers, that we started out with a three-year written lease , may have renewed it in writing, but some of mine have fallen into the back drawer and they are renewed verbally. I •m not interested in signing a lease such as this because there's a flexibility here. I can tell you, Mr.

Henderson, and the committee, that having rented some of this land - I can refer to a piece I've rented for about seven years now -while we have an agreement that says I 111 work the land for three years , we don't est ablish the rate for that time . The landlord is satisfied with me working it and we take a look at the agricultural picture and est ablish it in relationship to what other people are paying and the prosperity of the agricultural community .

And in 1970 and 171, I could give you people, but I•m certainly not at liberty, but I know a lot of people where the landlord asked them for less than the amount the agreement was written for because the agriculture was very depressed at that time . It was a liquidi ty that's unbelievable but it substantiates the excellent relationship that I think most of our farmers have with their landlords because it• s a one to one arrangement. MR .

HENDERSON: Before the government got into the process of paying for the land so as every landlord, or everybody that was selling,thought that he could get all cash, did you have people in your area that were selling on so much cash and then crop payments ? MR . J. KITCHING: Selling ? MR . HENDERSON: Yes. To a farmer starting up and then getting the balance in crop payments , you know, taking a mortgage back. Before the government got into this position where they seem to be now, even the Farm Credit, where they pay it out totally and then deal with the farmer or the tenant. MR . J.

KITCHING: I can't bring one to mind working just that way . But I have known a good many cases where the farmer selling his land and the new buyer got what credit he did and gave a first mortgage for it and the original holder was satisfied to take a second mortgage to carry the difference. It was a move of confidence in that purchase that let the new operator start with a minimum of down payment. MR.

HENDERSON: That•s the very point I was trying to make is that years ago before we had all the government schemes,that often a man who was retiring would sell to a young fellow for a small payment down and give him a time period to pay for it and that it often worked out good. I•m very pleased with the brief but I•m very pleased that we've had some body that has come to the defence of the landlords we used to have in the past and not make them all out to be bad guys who are just speculating and keeping people off the land . I realize though that you do believe in ownership .

Do you believe now that the government would be doing a much better thing to , shall we say, extend credit to these people rather than buy it and lease it to them? MR . J . KITCHING: My preference would be the option to buy. They have that opportu nity with FCC, there is some private money available for land, although over the hist ory of agriculture we all know that the private lenders have been cautious , but FCC money is an excellent system. I believe they're lending with as little as ten percent down now. MR . HENDERSON: Yes, this is now the federal plan that's going to come in.

It isn 't in yet, I don•t think, but it's in the legislation I think, and they're increasing the amount they1ll loan. I think myself that private ownership is the best, and if you can rent some,as you say, I think it •s a very excellent arrangement, only I believe that if the government would stay out of it that you would find many people that would own land whether they live in town or not, they'd own it and they 'd rent it to people and it would help them. I think that we had a pretty good arrangement before the government got into it. MR . J. KITCHING: That1s my idea. MR . HENDERS ON : Thank you, that •s all.

MR . CHAIRMAN: Mr. Jorgenson. MR . JORGENSON: I want to deal with one aspect of your brief, it's on the last page when you sugge st that farms will become bigger. The demand for capital for sophisticated machines, for skilled labour :will dictate that farms will become larger. I wonder if you can tell the committee--you operate a farm about 1, 100 acres or something like that? MR . J. KITCHING: lt 's more like 16, 17 .

518 February 21, 197 5 MR . JORGENSON: Sixteen . How much farm labour do you require to operate that size ? MR . J.

KITCHING: This varies.as you know .in the farming business, I try to keep one man full time; I try desperately to est ablish a cattle feeder unit that would employ a second man throughout the winter period but I don't find anybody who•s interested in doing the work that's necessary around cattle , and I found a number of people who don• t like to work in winter when they can find social benefits to keep them, But we have a potato business in conjunction with our farm; we employ as many as 20 people in harvest time.

The potato industry per se keeps another man busy full time, and until we hired a man who was doing our mechanical work I kept a guy busy in town; he wasn't in my shop but we kept a man busy repairing machinery. MR . JORGENSON: You have a somewhat diversified and intensified operat ion. Perhaps you •re not the type of operator that I•m looking for. But I wonder· say, on a straight grain operation, what do you think would be the optimum size that one man or his family could look after without hiring farm labour ? MR . J.

KITCHING: If you•re talking of optimum and you use the phr ase , "and his family" well then I don•t know whe ther that family has seven boys eligible to drive tractors or not. But assuming you•re talking of a one-man unit with some seasonal help , either from his wife or children or semi-retired father, father-in-law or something , he •s going to go into a large machine unit and he may well work 800 acres, I•d suspect he 's stopped at 1, 000, but there's all kinds of possibilities; they 're there for you at any size in hiring work done .

I could make a whole brief on it, It1s a nebulous kind of thing of what is the optimum one man can handle because these alternatives that are available, whether you're large or small, some of these .•• MR .

JORGENSON: I realize that there are variations and I'm not attempting to pin you down to any specific size, but the point I•m attempting to make is that it seems to me that it is becoming more and more difficult to find farm labour, that farmers today are now - I1m not sure whether it1s happening in your area but I know of some areas where it is happen ing -where farmers are now cutting down the size of their farms so that they can handle it without having to hire labour because they find that the difficulties in getting the kind of labour that they want are so great that they're better off from an economic point of view to reduce the size of their farms to what they can handle themselves and not worry about labour.

And the point I1m attempting to make is that you referred to capital, sophisticated machines and these other things1as dictating farm size , Do you not also think that the unavailability of farm labour may reduce the size of some farms ? MR . J. KITCHING: Yes and no. Is that a political answer ? MR . JORGENSON: That's good enough. If you will elaborate on that, MR . J.

KITCHING: Labour is a problem because these machines do take a skilled operator, but the thing that puts the single operator in a diffi cult position on a limited acreage is jus tifying the capital of that machine which may well have to stand idle too much of the season if there •s only one operator, because he can •t be making seed beds and seeding at the same time . This has put a lot of people to either a unit that would be a two-man unit or employing some arrangement with a neighbour or some sort to let him get more use out of that machine.

I suppose any economist would think that a farmer is plumb crazy when the optimum use of a large tractor is 500 hours per year . No other investor in a machine would hope to make it pay with so little hours'use and yet that• s, I read, about the best you can get without jeopardizing your crop production by trying to string your season out too long, And this is the danger of the one man not being able to utilize his machines long enough, MR .

JORGENSON: Yes, I know you•re aware,as most farmers are aware.that there is such an infinite variety of combinations that can operate a farm, that it would be pretty difficult to set one parti cular pattern in policy and hope that it is going to accommodate all farmers, That brings me to my final point -that it is necessary to have the kind of agricultural climate that enables a farmer to exercise his own best judgment as to how he •s going to run his operation without any outside interference.

Wit hout that flexibility then he becomes placed in a somewhat of an economic straitjacket where he is not farming to what he considers to be the best of his ability or making the best use of his available resources in labour, capital and money. - -

February 21, 1975 MR . J. KITCHING: This is true . Agriculture is such a dynamic industry that the operators have to be able to move very quickly towards what they think is an opportunity , 519 to seize it and take advantage of it , and this is why they need all the flexibility they can get and the history of this country has indicated that for the most

part it 's been very successful . And I'm a little concerned about planners from outside because frequently the best information they have is from records, and with all respect to them , they 're a history of what 's behind and that doesn 't necessarily mean that straight ahead is the direction to go. We 've had many operators make their own decisions and the history to me of agricultur e has been that for the most

part it 's been successful . MR . JORG ENSON: I just want to deal with one more point . And it has to do with the so-called energy problem 0 One of the great problems that I see facing us as a result of the energy problem is the increase in the cost of fertilizer . Do you not believe that very soon, or have we already reached the point of no return on the use of chemical fertilizers ? To what extent can fertilizer prices increase before you on your own operation are going to say, well it pays me no longer because there is no return in that kind of investment; I'm breaking even or even losing money. MR .

KITCHING: Here again you 're going to have to have 35 , 000 operators, that 's what they are, each using their own pencil and calculating it . Fertilizer is one input , and not necessarily fixed , while the price is, and for myself I'm looking now at some crops which will take less fertilizer, some that appear to me to have less risk in them and I will use higher chemical inputs there adjusting this to what I think is less risk in the growing season or in the marketplace. And everybody is doing this .

I don't know where that point is; and it moves, it 's not the same place as it was last year, it may not be the same place next year . You can drop the price of cereal grain or up it and the point of economic return has moved with it . That •swhy it 's very difficult . You can make a chart but you'd better not say , this is the point, period. MR . JORG EN SON: And further to that you'd better not plan in the future on what the experience of the past has been. MR . J. KITCHING: Right . MR . JORGENSON: Thank you, Mr. Chairman . MR . CHAIRMAN: Mr . Uskiw . MR . USKIW : Yes .

I missed part of your presentation although I think I got through your brief very quickly . My impression is that you believe that there is no need or no desire for an opportunity for land control outside of ownership. Is that correct ? Or did you say that a free choice is okay ? I didn 't quite follow the brief . MR . Jo KITCHING : No, Mr . Uskiw .

I said that decisi ons were going to have to be made particularly regarding use , and I think that "use" as you have said on Page 10 of the Working Paper is perhaps the imp ortant thing, has some decisions that have to be made and this will be the responsibility of governments, and some of us won 't like some of those decisions . MRo USKIW : I see , yes . MR . Jo KITCHING: But they 'll have to be made . Some of them will be against agricul- tur e . MR . USKIW : Are you opposed to people in your community having the right to lease land as well as the right to own it? MR . J. KITCHING: No . MR .

USKIW: You'd say that 's u p to the individual ? MRo J. KITCHING: That 's right . MR 0 USKIW : You have no objection to that option being made available through the credit program --or through the MACC ? MR 0 J. KITCHING: I think there are other alternatives , I would rather develop other alternatives for ownership . . . MR . USKIW : There are many alternatives but I say, do you believe that people should have a free choice in determining that for themselves ?

Do you see anything wrong with the right of people to choose for themselves to do what they want to do - whether they want a mortgage or whether they want to lease ? MR 0 J. KITCHING: No, I think they have that right . I 'd like to see them with that right . MRo USKIW : That's the way of today . So you 're not quarreling with the options that are available today then ?

520 February 21, 197 5 MR . J . KITCHING: No . MR . USKIW : Yes . Okay . Do you avail yourself of lease land or credit or mortgage money or do you yourself in your farming business participate either through mortgage institutions or through private landowners or public landowners on lease land ? What is your own operation ? MR . J. KITCHING: Both . MR . USKIW: You do both ? MR . J. KITCHING: I have some mortgage on the land I own and I rent some land . MR . USKIW: I see . So you 're quite flexible on that score ? MR . J. KITCHING: That 's right . MR . USKIW : Okay .

You think the government should maintain its int erest in agriculture through the various programs and agencies we have or do you think we should be out of them ? That 's a general sort of question . I 'm talking about the credit program and the options avail able. Do you think they should continue or should we get out of them or • . • In light of the fact that we have a federal credit agency and we have a provincial one, should the province keep its agency going or should it get right out of it and just leave it up to the Federal Govern ment; or should both governments get out of the financing of agriculture ?

Or should we both stay in in other words ? MR . J. KITCHING: I think they should both stay in; I think the y are going to . Govern ments are in in many many programs through our total economy and I think they have a purpose to play. But my feeling on this is that they should not be overdominant , that they should let the economy work as much as is reasonable and that the government should act as a balancing wheel , if that explains it to any •.. MR . USKIW: But you wouldn't want us to get out of any of the programs we're now in ? MR . J. KITCHING: I think, Mr .

Usk iw , our concern here -and this is not the first hearing I 've sat at and listened to the people presenting their briefs -and I think their concern is not with where it is now but that it might grow and grow unnecessarily large . MR . USKIW : Well let 's stop you there for a moment . Let 's assume that programs grow but they only grow as a response to the demand placed upon those programs by you, the p eople . Would you think that you should be denied the right of any program to grow even if it's your wish that they do grow ? I mean it can only grow if people participate in them -any programs.

And to the extent that voluntary participation is not there they will in fact disappear . You know, you 're saying you 're worried about the future growth of some of these programs; I'm saying that depends on you and therefore why should that be a problem? MR . J. KITCHING: Not entirely. It would depend perhaps more on the intentions of the government to develop that program. MR . USKIW: Well let's assume that .. . MR . J. KITCHING: Because they can subsidize a program and make it so very advan tageous that it has abnormal growth . MR. USKIW: Well but we have su bsidies in tw o areas .

We have subsidi es through credit; we have subsidies throug h leasing arrangements . So I think we're on a sort of balance there , both systems are subsidized to some degree . And I appreciate that you can tamper with either . My point is that as long as the people of Manitoba or you, the potential custom er , have a demand for a program, accordingly that program will either expand or reduce in its scope, and therefore since you are going to be the one to determine that , you know, why should that be of some concern at this point in time ?

I mean we will respond if you want us to respond and if you don 't want us to respond we will say , well no one is usin g the program , let 's throw it off the books. MR . J. KITCHING: I think where a program is being used, this is evidence that it's good; unless say.it is set up to develop government policy to the extent that it is an unrealistic advantage . There are other alternatives in land holding or many of the things we 've talked of and government can direct the growth of a nation by use of subsidies and I think this is being done. MR.

USKIW : Are there any unrealistic programs or - yes - or aspects of programs in our present system and in our present program ? Is there anything unrealistic about them in your opinion ? MR. J. KITCHING: The thing that I see most often , Mr. Minister , in our subsidy - - -

February 21 , 1975 521 (MR. J. KITCIDNG cont'd). . programs and many of the others,andthis is a criticis m you have made of other governments, that they have come too late or toa little or at the wrong time, and this is what sofrequentlv happens with government , particularly their subsidy programs. I don •t have the answer as to how this is to be developed but your servants and staff looking back, _see what pattern has been developed but the businessman out there trying to stay alive has to be looking more ahead. And I could illustrate this with the cow purchase program that was available until this September.

We had the privilege of grants I think to buy female cattle . It was at the wrong time . MR . USKIW: Why was it at the wrong time , sir ? MR . J. KITCHING: Well this was available and people bought female stock over the last two , three years and I don't need to tell you what it1s done; it has aggravated ... MR . USKIW: Yes. Do you think people bought cattle because there were subsidies or do you think they bought cattle because the market was good ? MR . J.

KITCHING: A government program directed in a certain direction whether or not it becomes one factor, is indicating to the people,first, that the government thinks it•s a good direction, and while they may not take advantage of it they think that these people with their knowledge and their ability to assess the situation , because there are economists on staff in the Department of Agri culture and manyot hers,thi nk it's a reasonable direction to go and therefore they follow it. MR . USKIW: All right , look, let's put it in the right light .

Governments usually look at the global picture and in Manitoba the government's global picture would be that we would want some balance in production, some diversity , we wouldn't want to have all of our eggs in one basket, so to speak, and therefore to that extent we would provide incentives to bring about that kind of balance in production. You know, we always sort of seem to think that if we have secondary processing in Manitoba that that is good for agriculture , it's good for labour, it's good for the revenues of the province, there are many spinoff benefits .

If you ship out all of the raw resources and let someone else do these things then you are really also in a position to export your labour behind the resources . There are global questions that arise. And while for you as an individual it may not be a good thing to jump into livestock production, in terms of trying to balance the province •s economy it may be good to have 40 percent of our economy relating to agriculture, 30 percent to grain and 20 percent to some thing else and so on. And it applies differently to the individual.

So you can1t confuse sort of government economic objectives and try to relate that as being a suggestion that each individual should do all of these things, and that's where the people make a mistake quite often. They try to relate the global overview position of any government, federal or provincial, as sort of being the direction that they want everyone to take . And that is not the case. They are really striving for some balance in the total picture , but not expecting that every individual should sort of follow that same trend or patte rn . MR. CHAIRMAN: Mr. Johannson. Well, thank you. Mr . Dillen . MR .

DI LLEN: I would like to say that it is very clear from preceding hearings that the people of Manitoba do not want the government to own the land. Would you put all of the people in the same basket as being of that view ? And I 1m talking about the people I •ve referred to; the people of Churchill, the people of Thompson, the people of Lynn Lake, Leaf Rapids .• MR . J. KITCHING: We can't hear you, Mr. Dille n. MR . DIL LEN: Okay. You say on Page 4 of your brief that it is very clear from preced ing hearings that the people of Manitoba do not want the government to own the land.

Are you not placing all of the people in Manitoba into the same position ? How do you feel that you •re getting that feeling that the briefs represent the feelings of the people of Churchill, or the people of the remote communities, or the people of Thompson, or the people of The Pas , you know ? What gives you the impression that all of the people in Manitoba do not want the govern ment to own the land ? MR . J.

KITCHING: I think I said "from the hearings ." Now, having followed the hear ings to some extent , the balance of the briefs --and, you know, this is a question where you can 1t have 100 percent unanimity and I was never very good in English and I don •t write in too comprehensive a manner, but then that isn •t necessary nowadays , but • . . MR, DILLEN: What you said .then,was that the position of the people who were presenting briefs was that they did not want the government to own the land . MR . J.

KITCHING: Yes, and I think you must concur that for the most part -and you wouldn 1t expect 100 percent unanimity - for the most part the people have spoken against the

522 February 21 , 197 5 (MR . J. KITCHING contrd) ••••• government ownership . Those who were for it have had as much opportunity to speak and by their silence -there's an expression about that -that they're more or less prepared ••• MR . DI LLEN: Why do you think they take that position ? Could you give me a ••• MR . J. KITCHING: Who are you speaking of ? MR . DILLEN: The people who presented briefs in opposition to government ownership . Why do you think they take that position ? MR . J. KITCHING: I think inherently they have wanted to own their land.

They are for the most part -again, we can't have a black and white , absolutely all the people one side or the other -but they prefer to run their own businesses . They're small businessmen, if you want to call them that. They believe in that syst em. MR . DI LLEN: Would you also refer to them as cussed ly independent ? MR. J. KITCHING: That term is a little stronger than I would have used. Independent, but maybe not cuss edly independent. I think, too, that their concern would be -it's been expressed here -the concern that the large farmer has the better advantage to grab more land.

Dollars beget dollars ; power begets power; bureauracy begets bureaucracy. I think this is one of the underlying concerns, that they're afraid that it needs nothing more than an order-in council to change the lease arrangement or some of the things; that while the White Paper is only a look, and a very inaccurate look, at agriculture today, we've seen White Papers become policy, and I think this is underlying some of their concern. MR . DI LLEN: Would you call that a distr ust ? MR . J. KITCHING: Yes, you might call it a distrust. MR . DI LLEN: What is your personal feeling ? MR. J.

KITCHING: My personal feeling is along the same lines. I•ve watched another commission develop and their strength has grown and grown, and whether this is distrust or not, it' s been a change from what was an innocuous paper to a policy, and changes come within it. So I think you can appreciate our position, Mr. Dill en, that once

an Act is passed it is very easy to make adaptations to it that give those under that jurisdiction even more power. Our farm people parti cularly do want to keep as much control as they possibly can of their own business , their holdings and their industry . MR . DI LLEN: I think you• ve heard me say here, just prior to thi s, that the people that I represent in the mines are very independent as well. They•re independent bonus miners . Now, what I failed to mention to you, that a great number of them I would describe as radical socialists .

So, the independence is not restricted to one parti cular political philosophy . But I want to get back here a little bit because you said some other things . You say that MACC, before it withdrew from bank loans, was also helping; the banks are becoming more in tune with modern agricultural needs . When did they start becoming in tune with agricultural needs ? MR. J. KITCHING: From my experience, Mr. Dillen, they did at about 1942 when I was a 17-year-old kid and rated a $20 0.0 0 loan, The banker gave it to me.

That loan has gone up and down, and there have been a few times when I have been farming without bank money, but as I said, credit is becoming one of the tools that we use consistently . Industry does it. And I have found that the banks, particularly last year, yo u•ve seen virtually every chartered bank take agricultural specialists, men who had a good deal of agricultural economic background, on to their staffs . They're developing. They•ve got the trade names for them bank plan, farm plan or anything you want -but lines of credit for the farmer to operate with .

They• re financing many, many of the feeder cattle that are being fed in Manitoba on the strength of the value of those cattle . For the most

part I think they are in rural Manitoba, into agriculture , and I think they•re becoming more so all the time . MR . DILL EN: Are you the same Mr. Kitching that has a share in the vegetable storage plant at Carman? MR . J. KITCHING: Yes. MR . DILLEN: I see some conflict here in your statement that the banks are becoming more in tune with modern agricultural needs . Would you consider that to be a modern agricultural need? MR . J. KITCHING: Which , the Carman vegetable storage ? MR. DI LLEN: Yes, MR . J. KITCHING: Yes , this building has been held up as one of the significant storages

February 21, 1975 523 (MR . J. KITCIDNG cont•d) ••.•. in Canada and we have shown groups from Ontario, Saskatchewan . We had an international group who were attending a conference in Guelph, came to Winnipeg and came to Carman to see that st orage this summer. They were also interested in how it was financed. Seven farmers , I think--seven of us got together and st ructured it, using bank money to finance most of it. Pardon ? MR . DILL EN: Bank money? MR . J. KITCHING: Bank money, when we started it, yes .

And it' s--I speak on this with pride , I am one of them--it's a darn good storage and it's been a good business venture . Wi thout the Bank of Montreal in 1969 I don•t know how we could have got it starte d. MR . DILLEN: Why was it necessary in 19 70, if the banks were in tune with modern day agricultural needs, for the Manitoba Agricultural Credit Corporation to take over the loans ? MR. J.

KITCHING: Banks , just like other people, run into tight policies, shortages of money, and this can happen to banks and I found out in a second time by experience since then, that banks sometimes get to the point, with escalating costs, that if they•re going to service the loans they have and the priorities the bank has set up , so much money is going to agriculture , so much will maybe go into Manitoba and no more, the Bank of Montreal was not able to lend us the extra capital we needed, but MACC at that time were entering the field and they took over the loan .

But I• m sat isfied that the bank•s explanation ... MR . DILLEN: You didn•t feel any sense of dist rust of government at that time ? You were able to get a loan or a guarantee in excess of a quarter of a million dollars; you didn•t have any distrust of government at that time ? MR . J. KITCHING: This was a loan. It's a signed mortgage and conditions offered are there and I don•t see how they can change during the lifetime of that mortgage , MR . DI LLEN: So you don•t have any distru st, then? MR . J. KITCHING: We saw the paper; we read it; our lawyer read it, and we signed it and we were satisfied with that.

It was a ••. MR. DILLEN: Then you don• t think there•s going to be any change? I mean, you feel se cure ? MR . J. KITCIDNG: I would like to think that a registered mortgage document is a secure document and the conditions of it are not apt to be broken or changed. MR . DI LLEN: I certainly hope that is the case as well , MR . J. KITCIDNG: Pardon. MR . DI LLEN: I certainly hope that that is the case as well, be cause I have a mortgage document that I hope the bank doesn• t pull away from me , you know. MR . J. KITCIDNG: The bank isn• t involved in it now. MR .

DILLEN: No, no, but in my own case , I have a mortgage with a bank, you see , and I hope that that• s secure . I hope that it's just as secure as any condition that you may have with government, MR . J. KITCIDNG: If you li veup to your conditions , have you any reason to believe it won•t be secure ? MR . DI LLEN: No, and I hope you don•t have either, If you feel you•re living up to your conditions you have no reason to believe that there is any insecurity about that arrangement. MR . J.

KITCIDNG: I would hope not but I• m ••• just a little sus picion , a little nervousness I should say from your saying that maybe that mortgage is not valid that the MACC signed. MR . DI LLEN: No, no, I•m not saying that at all ... MR . J. KITCHING: We•re living up to our conditions and if that•s the case then we will get out of there awful fast and refinance if we can. MR . DI LLEN: No, All I want to draw from you is that you feel secure , as I feel secure with my arrangement with my banker. MR . CHAIRMAN: Mr . Uskiw, MR. USKIW: Yes. Mr.

Chairman, I wanted to ask one last question before you cut me off, so to get back to that one, That has to do with why it is that you express a concern that the government would be the owner of land when, within the land lease program, it's obvious that the dice are loaded in favour of the lessee to buy in at some point, MR . J. KITCIDNG: I want to see this thing work a li ttle longer before we establish real assessment of it.

524 February 21, 197 5 MR . USKIW: No, but let me clarify. Itrs obvious that if land values increase, and to the extent that they do over a period of years , not only does it enhance the position of the lessee to buy but it writes off his subs idy if the land values increase to a certain point, Therefore, that' s a decided advantage to the lessee to exercise his option. MR . GR AHAM: ••• MR . USKIW: Mr. Chairman, on a point of order, I don• t think Mr. Graham has a point.

If the lessee wants to exercise that option which is open to him at any time after five years, he can choose to do it at the time that it' s most advantageous to hi m, Therefore, the dice are loaded in his favour . So, how do you see that as resulting in the government owning the land. It's only in transition. It's really in transition, isn• t it? Unless he chooses not to bother to take ownership of it, MR . J. KITCHING: The leases I•ve read say he may. Does that give him the irrevoc able right to buy • • • he says the government must sell to him ? MR .

USKIW: The contract provides that at his option after five years he may buy that land - any time he chooses. MR . J. KITCIDNG: But if the government changes their policy and ••• MR . USKIW: Well, he has an agreement, That• s an agreement, He can sue us if we default on it. MR . J. KITCIDNG: That makes me feel a lot better about it, Mr. Uskiw. MR . USKIW: Okay. Now, let me pursue another question. Did you know how this program arrived or what was the basis of it, who made the legislation possible for it? Did you know how that happened ? Or what is your impression ? MR . J. KITCIDNG: No , I didn•t really know. MR .

U SKIW: I see . Do you know that it was the Conservative government that put the Act on the books to allow us to enter that program ? MR . J. KITCIDNG: This is the original MACC Act ? MR . USKIW: That• s right. The powers of the old Act are the powers we are using . MR . J. KITCIDNG: Yes, I believe ••• but the Act has been changed. I think this is one of the points I•ve been trying to stress. The Act that was there has been changed, and this can always happen. MR . USKIW: The Act that was there that gives us the authority to do this has not been changed. Every word is the same as it wa s.

Now, would you feel differently if the Conservatives were still in power and they were running the program ? MR . J. KITCHING: Wit h all respect to your friends and mine •.• MR . USKIW: Because I don• t know whether they had that in mind when they put the powers into the Act. I don•t know wha t their motivation was . They wrote the Act; we are using it; we haven•t changed it in that respect. Now, is there a difference in your view as between the Conservative Party running a land lease program versus the New Democratic Pa rty running a land lease program ? MR . J.

KITCIDNG: I find this a rather interesting question when there is my brief to discuss and several others waiting, but I would rather deal with an individual. I think I stressed that in my brief. I• m sorry you either didn• t have time to read it and missed it, but I stressed this, that I liked the individ ual ownership relationship we•ve had and I would be happier. The first mortgage money I ever borrowed was from a private individual and I• m darned sure I couldn•t have got it from FCC then or any government corporation. MR . USKIW: Would you be ••. MR . J.

KITCIDNG: I didn• t meet their standards but I so far .•• MR . USKIW: Would you be worried if we had amended that Act in accordance with the provisions in this Act, whi ch is the Ontario one, the Ontario Land Corporation Act, which gives the Corporation the powers of expropriation, would you be concerned if we amended the Act that we inherited from the previous government to give us these kind of powers ? MR . J.

KITCIDNG: The Ontario Act is pretty st rong but I think, as I said in I think the third page of my brief, your government and other governments are going to have to take stands on this and do some of this, because we•re going to have to preserve, determine the direct ion of growth , not just agriculture, urban growth and many other things , and I•m disappointed that while it's been called the Land Use Paper, it has hardly touched on that iss ue ; it has talked virtually about ownership .

I hope that perhaps another wint er, some other time , we can ask for a study of ownership , or use , but you• re going to have to, or govern ments are going to have to have that, because Canada is getting a li ttle more crowded now -

February 21, 1975 (MR. J. KITCIDNG cont•d) ••... and we• re going to have to, as was spelled out by the speaker just before supper, preserve agricultural land, and there• s going to be some very unpalat able decisions . But if they•re fair and there• s compensation for those who have to give up properties one way or another, I'm afraid I can•t quarrel with it. 525 MR . USKIW: Do you think, though , that we should strengthen our Act to have a provision as strong as in the Ontario legislat ion, which provides for the right of expropriation, or do you think that would be going too far ?

I think that• s going too far, quite frankly, but I•m asking you. MR . J . KITCIDNG: I don•t know that much about the Ontario Act and I•d hate to comment on it, having seen it only from that dista nce, Mr. Minist er. (Laughter) MR . USKIW: Well I don•t know their intent. They may never use the powers of that Act. All I can assure you, sir, is that if we had put this kind of document on the table in the Manitoba Legislat ure related to a land tenure syst em, that we would be accused of being Communists . They haven• t been accused of being that in Ontario, MR . CHAIRMAN: Mr. Barrow . MR . BARROW: Thank you, Mr.

Chairman. I am certainly happy that you have so much faith in banks, but is it true that you borrowed money from the MACC to repay the Bank of Montreal ? MR . J . KITCIDNG: Yes. Because I think you can understand that when we were refinanc ing we naturally had to pay out the first mortgage . We didn•t want to deal with two major creditors, MACC wouldn •t have wanted it any other way , so we borrowed the total parcel and paid off our original mortgage . A Carman vegetable MR . BARROW: Can you tell me the amount ? MR . J. KITCIDNG: Pardon ? MR . BARROW: Can you tell me the amount of money you borrowed ? MR . J.

KITCIDNG: Yes . Lit tle brother here has got the calculating mind. What did we borrow ? What was your question ? MR . BARROW: Could you tell me the amount of money you borrowed from the MACC? MR . J. KITCID NG: Was it $397 ,0 0? We were expanding the building. Did you know that? We expanded the building. We did n•t borrow just because the Bank of Montreal or the chartered bank pulled out, we expanded the building . That• s why we•ve got the biggest vegetable storage in Manitoba, in western Canada, sir . MR . CHAIRMAN: Mr. Uskiw, on a point of order. MR . USKIW: Mr.

Chairman, I don•t think that anyone should have to give the financial details of any transaction with the MACC. I think it would be unfair. MR . J. KITCIDNG: I don•t mind this, sir , because we have put this information in front of people because as I said, it' s been a good working thing and I have no quarrel with our relationship. The Carman Vegetable Storage still does their business with the Bank of Montreal, the original bank, and it was a harmonious arrangement right through, but we expanded and we needed an extra -it was $147, 000, Montreal couldn•t put up at that time .

The interest rate was high , summer of 1970 . MR . BARROW: Thank you, MR . CHAIRMAN: Well I don• t think that that is relevant , Thank you, Mr. Kitching. Mr. Lloyd Kitching. MR . L . KITCIDNG: Mr. Chairman, Ladies and Gentlemen. When I put this together I didn•t know that I•d be on the same platform as the preceding speaker and there may be some duplication because obviously we do tend to think in the same channels at times. I appreciate very much the opportunity of speaking to you today.

I•l l attempt to be very brief, not because there aren• t a lot of things I•d like to say but because your time is limited and I know you must have heard many of the same things many times. Obviously we are going to have some legislation concerning land ownership and use . Most of the other provinces either have at the present time or are about to have some regulations.

Our concern therefore is to have legislation that is well thought out and firs tly is good for the agricultural industry, because if it doesn• t promote a strong and viable industry, able to supply our food requirements and to compete effectively into export markets, our whole province will be the loser. And secondly, it must not favour agriculture at the expense of the consuming public - and frankly I• m not very darned worried about that one -but any legislation has to be acceptable to the society as a whole . I would like to commend the government for starting in the right direction by holding these

526 February 21, 1975 (MR. L. KITCIDNG cont•d) • hearings and by publishing the Working Paper that• s been prepared by the Manitoba Department of Agricultu re . Whatever legislation grows out of this,Ws bound to have very far-reaching effects1so it 's imperative that it be based on well founded information. When I read the Working Paper, I• m concerned that at best its data is inadequate , and some of the conclusions reached are countrary to the facts as many see them. I'd like to en large on one or two examples.

One of the basic conclusions which is emphasized several times is that productivity per acre declines as acreage per farm increases. This conclusion is drawn from Table 27 which shows a farm of under three acres selling $1 , 726 per acre and steadily diminishing returns as acreage increases. Pe rsonally, I don•t think we should really discuss these figures . Itrs meaningless to compare a two-acre strawberry patch to a 5, 000 acre ranch in an area of low producti vity ; and also it's ridiculous to base any conclusion on one year•s data . Every year is different in agriculture.

How ever,since these figures have been used to support this conclusion I•d like to take a closer look at them, Obvious some of the small acres are associated with large hog, poultry or other highly specialized enterprises. The value of production is directly related not to the land base but to the labour input.

Many others are not viable farm operations but part-time farmers with off-farm income, In the 70 to 400 acre size , there•s about 14, 000 farmers listed there and their average sales are only $5, 000 , Well I•m not saying there•s anything wrong with this - in fact it's a good way for some farmers to become esgablished -I•m merely saying that it confuses figure s. In the farms over 400 acres the difference in sales per farm is much smaller.

If you look at the sales per improved acre, which is at least as valid a comparison as the other , we•ll note as follows , and I don• t want to go through too many of the se pos sibly, but in the 400 acres to 559 they sold $24. 16 per acre of product; in the 560 to 759 size bracket they sold $2 2.9 0 worth of product; in the 760 to 1, 119 acre size they sold $2 3, 02 worth of product; in the 1, 120 to 1, 599 size range the sales were $22 ,4 5; in the 1600 to 2239 acres size they had sales considerably larger, $28, 00 per acre, $2 8,0 4 actually , The next size figure 2, 240 to 2, 879 , they had sales of $32, 01; and in the largest category listed, over 2, 880 acres , the value of sales per acre, per improved acre rather, was $44, 27.

This is the table that our paper tells us proves that produc tivit y per acre declines as the acreage increases, Since I couldn• t draw any conclusions from this kind of information, I looked for other sources, particularly the farm records compiled over a period of nearly 20 years by members of the Carman District Farm Business As sociation , I know you•re familiar with that associa- . tion so I•ll only point out that these records have been carefully recorded on the individual farms .

They were meticulously audited -and I know what kind of wild guesses go into making up DES figures - and they were analyzed by economists connected to the University of Manitoba or the Manitoba Department of Agri culture. The information has formed the basis for much of the research in teaching of agricultural economy. I will start that one over. The informa tion has formed the basis for much of the research in teaching by agricultural economists in Manitoba, If we turn to Page 3; I have a chart set out here that is drawn from these records.

I don•t want to go through too much but if you look at the right-hand column which is the fairly good soils -incidentally these were broken down in our records for farms in the good to excellent soils, the good soils , and the fair to good soils , and then in turn each of these divi sions were subdivided into small, medium and large farms , and I•ve just drawn out here the production per acre, crop production per acre rather, because I figure that is significant, and also the total production per acre.

Following down this -well p s I say, in the fair to good column, which is the bracket that my farm•s always been in, the small farms over the period of years I drew out here had an average production of $26, 00 per acre, the medium-sized farms had an average production of $33 ,0 0 per acre, and the large farms had an average production of $42 .0 0 per improved acre. I must confess that those average figures were just, they are total production, That• s not in your record .

I sat down afterwards and just scribbled that out for your information , The others show a similar trend but it's not as pronounced in the other soil groups. While I was n•t able to file the data for all the years due to changes in the format of the reports, the seven years data attached certainly doesn•t support the conclusion that increased size results in decreased production per acre. In fact it definitely indicates that increasing the size of the farm results in an increase in both the value of crops produced per acre and the value of total farm production per acre.

When I refer here to the value of production, I• m - - -

February 21, 1975 527 (MR. L. KITCHING cont•

d) not referring to total sales but to what is actually pro- duced on the farm. For example, if a farmer sells $5 ,0 00 worth of steers but he bought them for $3, 000, then he•s produced $2, 000 worth of beef, and you notice the figures that DBS use here are total sales, and total sales figures can be very misleading. My table was completed only up to 1966 but looking through figures since that time shows the same trend -and I might point out that in •6 6 there were very few 100 hp tractors in Manitoba. In 19 74, 200 hp are quite common and 300 horses aren•t unusu al.

This trend to larger machinery can only increase the efficiency of the larger farm relative to the smaller operator, particularly in field crop prod uction. A look at several years production figures from the Western Manitoba Farm Business As sociation shows the same pattern, and this is taking figures from the Minnedosa-Hamiota area just for a change of locale. For example, in 1968 the value of crop production per improved acre went from $2 0. 58 for the smallest group.

As the size increased, production went up to $22. 23 to $23. 75, then slightly down to 22 .9 5 for the fourth group , and then the largest group it went up to $2 7.0 4 an acre. If we look at labour efficiency we find a very big advantage favo uring the large-scale operator.

For exam ple , the economic report Number 15 pu blished in July of •71 by the Economics and Publications Branch of the Manitoba Department of Agri culture shows the following: (And their farms here -;,ere split into five sizes wit h the medium category repre senting 50 percent of the farmers whose records were analyzed.) The value of total production per man equivalent on the small farm was $6, 232; the medium small farm, a slight increase to $6, 321; the medium-sized farm $13, 105 production per man equivalent; the medium large, the production went up to $18, 687; and on the large farm, the final category, it was down somewhat to $1 8, 188 .

The crop production per man equivalent shows a pretty similar trend · $4, 344 production per man, of crop production that is, on the small farms, and up to $18, 394 on the large farms . The crop production per improved acre, I think, is a pretty meaningful figure . Now on the small farm it was $16. 85; on the medium small it was $1 7.4 4; the medium went to $21 . 74; the medium large up to $2 5. 61 per improved acre ; then on the large farms here again it was slightly down to $22. 93. The chart shows it pretty strongly. A three-fold increase per man equivalent and a very significant increase per acre.

The introduction of this bulletin says in part and I quote , "The number of records is, however,relatively large and represents a broad cross-section of farms in terms of size, soil type , enterprise combinations, etc. , so as to include most, if not all, variables that could affect a farm business in a given year." There are two real questions raised by this last table: Firstly, when the Department of Agriculture has this amount of data, in which they themselves have expressed considerable confidence, all indicating the advantages of scale , why do they take such inconclusive and meaningless information as is put into the Red Paper on Page 74 - that• s the chart that' s already been referred to - and then devote such efforts in attempting to show that the increased size leads to decreased productivit y� The second question: Look at the labour efficiency.

The value of production per man equivalent has tripled three times. We could even sell buses and aircraft if we could do that in other industrie s. Well ,let•s lay this fact out on the table for all Manitoba consumers to take a look at. Can the consumers afford a policy that would put three times the labour cost into our farm area food products ? Remember too that we have to export into a competitive market. There• s a plant in Winnipeg that made many millions of dollars worth of two and three hundred horsepower tractors last year.

They• re either for us or for our competitiors, Manitoba farmers have to be able to operate on the same scale as U .S.A. and other farmers or we•ll be dead in the marketplace, 0 ne other major conclusion is emphasized repeatedly: "If the ownership of land is separated from the operator all or the major part of the benefits of increased productivity or price will go to the owner." And this is repeated several times through the paper here . Well fortunately repeating it several times doesn•t make it true . The owner•s land isn•t worth anything to him unless someone farms it.

Actually he needs the tenant much more than the tenant needs the land, and the tenant, particularly if he has a record of being a good operator, is not an economic vassal of the landlord. Personally, I own about half of the acreage that I farm and I rent the balance. I rent land at the present time from four private individuals . One parcel, like my brother, I•ve had for 25 years in spite of its change of ownership -all four of them are local people and they under stand farming, the bad as well as the good, and I•d rather deal I think with any one of them

528 February 21, 1975 (MR. L. KITCIDNG contrd) .•••• than with a government agency. I feel more confident of continuing on the land than most of the people who presently have government leases, graz ing permits , etc. , and I• m not thinking primarily, at least completely of Manitoba, I know other provinces where they•ve had problems in this area. I mention my personal experiences here-not because it' s unique in any way-but rather because it's so typical of the present system of holding land. In fact Page 68 of the Red Paper here shows how this mix of ownership and renting has increased tremendously.

I think it illustrates that the industry is adjusting very well to meet changing conditions. Jt!s claimed that foreign investment to land is a real threat, but it' s admitted that depressed conditions in agriculture and subsequent decline in land price have opened the door for outside capital . If economic conditions are maintained that make it attractive for a farmer to stay in business, the main impetus for foreign investment is gone; in Manitoba farmers will be the aggressors in the land market.

There is some doubt that increased land costs add to the cost of food, and there should be a period in there, gentlemen. I guess some of you might put a question mark but I put a period; my secretary did n•t put anything. Competition for land and the higher cost ensures that a greater percentage of the land accrues to the more productive operators. The increasing production may more than offse t the increased land cost and the end result is cheaper food.

This part of the province, the Red River Valley, during the last 15 years has seen a gradual, quite noticeable, exodus of farmers who for various reasons were not producing as much value per acre as their neighbours. Many of them have relocated on cheaper land in other parts of the province, others have joined the labour force and we find an excellent source of skilled farm labour. For the most part everyone has benefited.

We have to face the question of how big a farm should be, and it's been kicked around quite a few times here today, but I think the very nature of agriculture puts an effective control on farm size . In the past -some non-agricultural corporations have ventured into farming and most of them have found it a disast er. It's hard for a large-scale operation to provide the attention to details and the day to day, or indeed the houl'-to-!tour decisions that are needed in a successful farm. And the same thing applies to a privately owned farm .

Managerial ability and desire put a pretty effective ceiling on the size of most operations. Even though much of the work is done by hired labour on the larger farms, the operator usually is the guy that has to run the machinery after the others have called it a day and on weekends , and fill in on every emergency. These ext ra hours and the on-the-spot decisions are what enables the family farm to survive during the tough times. If the farm gets too large these same factors work against continuing expansion. And I digress here a bit from my script too.

We talk of the high price of land and how it keeps young people from starting farming, but land is only one factor. While it 's a lot of money, it doesn• t depreciate; in fact it tends to appreciate in value, so land is much easier to finance than machinery, which can depreciate 50 percent or more in a couple of years. The Working Paper here says that the price of land in Winnipeg puts home ownership out of reach for many people. Gee, I•ve got enough land for thousands of houses and I• m still living in an old one.

Ws the high cost of materials, and especially the high cost and relatively low productivit y of labour that makes the new house so expensive, and as most of you know/ most of the material cost in a house is made up of labour because the trees aren• t too expen sive when they• re grown out on the back forty. Similarly, if farmland was all for free you•d hardly notice the difference at supermarket checkout, and that has been dealt with previously. Any farm policy must encourage labour efficiency. This has to be a key factor no matter wha t.

In conclusion I want to say that the time is certainly ripe for further study and action but by no means is it time to push the panic button . I hope the government will set up an independent commission to make a thorough and unbiased study, then make the facts public, Once we have data that• s accurate and reliable, then we can have a base to formulate a policy to serve the needs of the agricultural industry and of society as a whole in Manitoba. Thank you very much, gentlemen. MR . CHAIRMAN: Thank you, Mr. Kitching. Mr. Usk iw. MR .

USKIW: Yes , the statistics on net income of farm tax filers in Manitoba for the year 1972 suggest the following: That a gross farm income of 35, 000 netted about $4 , 046 , and a gross of 50, 000 or over netted 4, 790. Hence a very dimishing return on the balance of gross farm income between 35, 000 to 50, 000. In other words, diminishing returns in each

February 21, 1975 529 MR . US KIW cont•d). category from 11-1/ 2 percent on gross income in net returns to about 9-1/4 . What explains that ? Those are DES for Manitoba for 1972. MR . L. KITCHING: Did you say those were based on income tax return figu res;? MR . USKIW: Yes. These are income tax filers for the Province of Manitoba for the Province of Manitoba for the year 19 72. Up to 35, 000 -35, 000 seems to be the optimum position of gross income in whi ch case the best percentage net return results, but once you get beyond that you start slipping in net return on the additional investment. MR . L.

KITCHING: Well, Mr. Usk iw, I•m sure there are much better sources of in- formation than the tax returns; some farmers have even been known to cheat a wee bit, MR . USKIW: Oh, all right, that• s fine then. MR . L. KITCHING: But the fact is ... MR . USKIW: If that explains it then I understand, sir . MR. L. KITCHING: No, I will attempt , I•ll attemp t to explain it a litt le more thoroughly for you, I can say from my own experience that most years when you have the most profitable year you pay the least income tax . MR . USKIW: Okay. That• s fine. MR . L.

KITCHING: This is because your income tax is based on cash receipts. and in a year when you have a good income maybe you pay expenses that you• ve carried over from the previous year, or you buy fertilizer for the next year, and actually the figures that I see in the actual records that I•ve quoted give you the actual picture of the cash production on the farm. MR. USKIW: I might make the observation that it seems that if that is the explanation then all of the farmers , virtually all of the farmers in Canada cheat about the same because that• s the grass . . • MR . L.

KITCHING: I think most of the farmers in Canada have had a pretty tough time through those years. MR . USKIW: The picture is identical right across Canada once you reach past 35, 000 gross income. MR . L. KITCHING: I• m sure that agricultural economists who have figures to work with would have lots of figures to prove that $35, 000, you know, a farm that• s only going to produce $35, 000 isn•t going to be a viable operation in today• s world , MR . USKIW: No .

I just wanted to know whether you had an opinion as to why the statistics seem to indicate that, I• m not arguing whether that• s right or wrong, or what con clusions we can draw from it, I wanted to know whether you would draw any conclusions from it. MR . L. KITCHING: Well I•d like more accurate information than that because I•m sure that farme rs, they take in a tremendous range and there's an awful group of people classified as farmers that aren•t in the really what we•d call serious commercial farm production, MR . USKIW: Okay, MR . CHAIRMAN: Thank you, Mr. Kitching . Mr. Delichte , livestock producers. Mr.

Delichte, you•re the livestock producers, and where are you from? MR. DELICHTE: Mr. Chairman, we represent a fairly large are!! about 50 miles north west of here. We comprise several towns and the re's three of us going to attempt to answer questions and one of our group will pres ent the brief. You've got me recorded as a livestock producer but I'm a mixed farmer and also grain farming, and the whole area is representative of a real thriving mixed farming area. We' re not just speaking on behalf of one agricultural commodity. MR . CHAIRMAN: Would you indicate -you•re from ? MR . DELICH TE : I•m from St.

Alphonse, MR . CHAIRMAN: And would you introduce the two gentlemen who are going to be assist ing you , MR . DELIC HTE : Roger Perreault from Somerset, and Emmanuel Vandevelde from Mariapolis. I•m in the centre of a 20 mile radius which represents a similar area, similar type of thought, and we are trying to express the thoughts of all these people. MR. CHAIRMAN: Fine, Thank you , Proceed. I don•t believe I got the spelling, sir. MR . VANDEV ELDE: Vandevelde. Jt!s going to take a while if you want me to spell it, Mr. Chairman, Mr.

Minister, Committee members , ladies and gentlemen, I•m glad we still have a few with us tonight, We had a good representation to start off with but, like our fellow member said here , we are livestock producers and some of them had to go home and do their chores.

530 February 21 , 1975 (MR. VANDEVELDE cont•

d) I am presenting this brief on behalf of a group of farmers and their families from the communities of Mariapolis, St, Alphonse, Bruxelles, Swan Lake , Somerset, Greenway, Baldur, Cypress River and Holland, The purpose of these hearings, as we have been led to believe, is to get our feelings and views on land use and on land ownership , Your objectives of promoting smaller farms , encouraging young farmers, and controlling foreign ownership, are certainly a move in the right direction and would have the support of most farme rs .

How ever, the method being used to carry out these objectives cert ainly does not carry the support of many, and in particular those farmers represented by this brief. We are concerned that the effects of the program and policy could develop into something disastrous. We are approaching this hearing emotionally because we feel very strongly about the issu es. This is of deep concern to us . We are land owners , as our forefathers were , and our love of the land has been ingrained in us since birth.

A few of us have attended previous meetings , previous hearings that you held, and our general reaction was one of shock and dis belief at the mockery made of the briefs dealing with such an important subject. The impres sion we•ve received was that the Government was more interested in breaking down the argu ments in order to just ify the ir own policy stand than using this information given by concerned and informed groups in formulating their new policies. We are sincere citizens and would like our brief to be considered as a document of our genuine feelings.

When governments fail to listen, people become politi cally apathetic. Or is this what you want ? We are in favour of land zoning, that is, class iflying and usi ng land to its best productivity . Industrial and urban expansion should be directed toward unproductive land areas . Perhaps in this light there is merit in government ownership of certain parcels of sub marginal land, We believe that foreign ownership is not a major problem in Manitoba at this time . If and when it should become so, it can be easily controlled through legislative policy.

Our area of largest concern is the is sue of provincial ownership of land and their leasing program, Granted, the disc ouraging of foreign ownership and the encouraging of new young farmers is important , but we feel the solution through government land purchasing is not the right one . We are not against government ownership of land for recreational purposes, wild life conservation, or returning some submarginal land to grazing. However, in most cases, especially when productive land is concerned, we are totally against government ownership of land with public funds .

Let• s look a bit closer at private ownership and the dignit y and pride and initiative it inst ills in a person. Our forefathers and their families fought for developing the land, Toil, swea t, blisters and sore backs were all part of the hacking down of tree after tree, acre after acre. But all that didn• t matter because he knew it was his, and what he had he could pass on to his children. Burning, red, sore eyes from picking roots and stones in 30 mile per hour winds, and spreading straw on drifting soils when you could n•t see 20 yards past you.

But all this was done with courage and heart because the land was his and would eventually be given to his children. Controlling erosion. Painfully hand seeding small water-runs to grass . Conserving your straw in the fall versus burning. Planting and weeding new shelterbelts . All that in good heart because you knew the land was your own. Now, how would this compare to someone on leased land ? Why the hell would you knock yourself out if the land wasn• t yours ? Pride in your farmstead, repair work, painting, land scaping, making your honie a more pleasant place to live .

Would this happen if you were leasing and didn•t know for sure whether or not the land would be yours, or would the govern ment hire repair, paint and cleanup crews to keep these places livable? And what about the initiative and drive in private ownership ? If you know that a bankruptcy is possible and that you could lose your payments and security on your loan, you•ll jolly well make a go of it. Eighteen hours a day in seeding and harvesting will be possible, all right.

You•ll know that timeliness is the most importal'_!t factor in succes sful farming, On the other hand, how much effort would be put out if you were on a leasing program ? Maybe 12 hours a day would seem quite long , In promoting young farmers we feel our past low interest credit program was more effective than a government land-leasing program, because of the additional incentive in private ownership . Yes. Never would you work harder or be more concerned than if the land was yours . Decisions, whe ther they result in failure or success, will be much easier to live with .

The will to succeed is the best assurance of getting ahead. Another concern we have about government land ownership and leasing is in the selecting

February 21, 1975 531 (MR. VANDEVELDE cont•d) •••• for land rental, in the selecting of candidates for land rental. There is a possibilit y that political favouritism would be involved, and besides the unfairness of competing for land wit h public funds , individual incentive for expansion will be reduced because of large government fundi ng . The publicity of the se hearings and their content was almost non-existent. Not all farmers were given an equal opportunity in expressing their views because of the small number of meetings held throughout the province.

Surely an issue of such importance to farmers should have suffi cient time and publicity to make all aware of the situation . How come the Department of Agriculture is in such a state that they can't inform farmers on farm policy planning ? It seems not too many years back these type of meetings would have been publicized and promoted by our agricultural representatives. At that time ag reps were helping farmers to be more aware and interested in government planning of farm policies rather than just that of food production. Why has the pict ure changed so much in recent years ?

In concluding, let me say that we are the occupants of rural Manitoba and we are well aware of wha t working and living conditions are like . When an outsid er, a foreigner and not a landowner, comes in and exerts great influence on our government to change our style of life, our beliefs and our freedoms, then we certainly have the right to question his actions very closely . It should be the right of every farmer and landowner to be made aware of what is happening and what this type of program could lead to .

For this reason I urge you to give us suffi cient time to have all farmers participate in the initial stages of a policy that is of such importance to our lives and those of future generations . Beware of that sacred cow known as land. People have died fighting for it and will again. MR . CHAIRMAN: Mr. Uskiw. MR . USKIW: That was a most interes ting submiss ion, Mr. Chairman, ancl I should like to say that it's obvious from it, the contents of it, that there has been an awful lot of mis information conveyed somewhere along the way .

So I should attempt to clarify, for your benefit, sir , just the reasons as to our being here this evening. Your opening remarks had to do with the way in which the meetings or hearings had been conducted, and you tried to suggest that there is already a government land policy, and I should like to correct your impression on that. The reason that we are here is because there is no government policy on the question of land ownership and its use , and it emanates from a dis cussion in the Legi slature promoted by the Liberal party of Manitoba.

And I want to say that that doesn•t reflect badly on them; I think it's a valid subject matter to discuss publicly, as we are. The questions on the horizon, and indeed questions that are apparent today, are real ones so that it is wort hwhile having this exercise . But the basis of the committee's work has to do with the fact that there is no government policy, and because there is no government policy it was decided in the Legi slature that all parties would participate through these hear ings and that this committee would report back to the Legi slature .

Now, the question related has to do wit h why the Department of Agriculture is not very much involved in this question as a department, and why it' s not involved with respect to the publicity as to the hearings and so on. If you understood the way in which the Legi slature works , you would not have asked that question, sir . Once a committee of the Legis lature is set up to conduct hearings , it is then the responsibility of the Clerk of the Legis lative Ass embly, who is here this evening, to inform the public as to the nature of the hearings , the time and place .

And really, any department of government should only be minimumly involved, if at all, in that there is no posit ion of the government on the question , so that we wouldn•t want to leave the impression with the public at large that, because there is departmental involvement, that a posit ion is already taken. This is a fact-finding discussion ; this is what we• re all about; so that conclusions are far from coming at this point in time , certainly premature to arrive at any, basad on the discussions that we• ve had so far. Now, you also appear to be totally unfamiliar •.. MR . GRAHAM: Mr.

Chairman, on a point of order. MR . CHAIRMAN: Mr. Graham on a point of order. MR . GRAHAM: I think Mr. Us kiw has laid quite a bit of blame on the shoulders of the Clerk. I think it's the committee who are the ones who set the meetings . MR . CHAIRMAN: Mr. Graham, there is no blame being placed anywhere . That is not a point of order. The meetings have been advertised, as you know, in all cases and there is no one blamed anywhere. I think if it could be stated anywhere, it 's up to the members

532 February 21, 1975 (MR. CHAIRMAN cont•d) ••••• themselves to have informed the people in their community and I think Mr. Henderson did a very excellent job of informing his constitu ents , so don• t •• MR .. .. : Thank you, Your coffee was very good too, MR . USKIW: Now the point I was on, sir, was your apparent confusion , or misunder st anding of the existing land lease program through MACC, From the comment you made you obviously don•t understand the program. You talk about government having to fix buildings and paint them and things of that nature .

You know, if you•ll look at the agreement you will find that the government has no interest in the ownership of the buildings or the building site what ever . That is something we are not at all involved in through the land lease program. You will also recognize, if you look at the contract, that there is an option to purchase , and therefore there is no way in which the Crown could become an owner of land unless the people leasing it do not opt to purchase it at any given time , and it would only be through their decision that the Crown is left with the land , but not the decision of the Crown.

You then alluded to security of tenure, and there again that is an indication that you are completely unaware as to the terms of the security of tenure that are provided within that program. Your other point was political favouritism, and I don•t know just how to draw con clusions from that but I•ll put to you a question related to it. Is it your concern that somehow political favouritism will decide who should lease land and who shouldn• t? Is that the point you•re making? MR . VANDE VELDE : Mr. Minister , or Mr. Chairman, I•d like to start off, You have several questions there. MR.

USKIW: Well, no, the others are observati ons. This is my first question, MR . VANDEVEL DE: Yes, I know, I know. They're observations, but you• ve been talking for awhile and perhaps I might get a chance here. First of all, we wrote this brief and perhaps if we had a chance to rewrite it and we had lots of time , which hopefully more meetings would sati sfy , we would have realized that it is not policy. However, it certainly is your line of thinking.

This seems to be what you are defending, the fact of government owner ship and leasing, so if it is not policy and if we can•t express our feeling soon, that it may become policy very quickly.

The other point is, you say the Department of Agriculture , ag reps for instance , shouldn•t be involved in publicity, but if you are really concerned about us farmers in a program where our land is at stak e , our lives, our backgrounds , then perhaps you should be informing your agricultural representatives to help in the publicity, because we have built up in the past a confidence in them to keep us informed along these lines, Perhaps some of our representatives in parliament are not doing their job, so we are hoping that our Department of Agricultu re, ag reps , are doing that type of thing .

Now what was your question you wanted me to answer ? MR . USKIW: Well just on that point, sir , obviously there has been no lack of information around the Morden community because we•ve had one of the bigger meetings of all the meetings that we have had so far. MR . VAND EVELDE : I'll have you know that about 35 percent of those people out here came from our area, not Morden, MR . USKIW: You•ve been aware of it, though , that• s the point, Now ••• MR . VANDEV ELDE: Through accident, MR . USKIW: ••• the question specifically that I put to you was, what is your meaning of political favouritism ?

Is it the fact that you believe that somehow there would be politics entering into the consideration of a lease application, or what is • • • MR . VANDEVE LDE : Well, let• s just say that there is some leased lands that goes back to government ownership , If the price of land went down , this farmer who had a lease with you may just not be that satisfied in paying your purchase price and he may buy an adjoining parcel of land at a lower price, so the land remains in your hands. Now who is the next candidate to get ahold of that land in a leasing program?

I•m saying it' s possible, you know, going from past experience, it is possible that you might favour somebody who is politi cally inclined towards your party - and this isn•t necessarily your party ; it could be anybody• s party, whoever• s in power. I• m just saying there is a possibility towards it, I think we•ve seen these things before in appointments , MR . USKIW: All right then, let me then pose the next question which relates very directly, Isn• t that true about any governmental program ? If you have so little confidence in

February 21, 1975 533 (MR. USKIW cont•d) .•••• your political syst em, wouldn •t that be true of nursing homes, wit h senior citizen accommodation, with hospitals , with almost everything that government provides. Wouldn•t that be true ? Highways ? I mean, somehow we•ve su rvived that problem with a million programs that provide a general service to the people of Manitoba, and you•re· implying that this additional program would not escape that, that somehow it would become a problem with one new program that we•ve introduced.

You know, I would like to tell you, sir, that since the MACC has been in business, it has provided $83 million worth of credit to the farmers of Manitoba, and there• s been a dis tinctive pattern est ablished there . If you want to analyze it on political lines, most of that money went to Conservative-held ridings, including after the time that this government took office . I don •t know why it happened that way but it happened that way.

Now, if one wants to be very cynical and draw those kinds of conclusions, you know, I think we •d be in a posit ion where we would feel we don•t want to live in this world any more. We have to trust our fellow man to some degree, and the system . We have to work with it and to make it work. MR. VANDEVELDE: Well, grante d, Mr.

Minister, under normal conditions we wouldn't worry about this, but if you would get a party in power who perhaps would get a little out of line, here the network would be set down for just another place where you could use thi s type of poli tical favouriti sm, and if it can be avoided, then let's avoid it. But I think the real essence of our brief is the feeling we have toward s private ownership versus your government leasing. MR . USKIW : You mention, sir , that because of past experience that you have that con cern.

Would that be based on some knowledge of political favouritism at some point in time that you are alluding to ? When you say past experience, what are you referring to ? MR . VANDEVE LDE: Let• s dwell on the important things of what we are discussing here today and at the hearings . I think we are maybe missing the point of land ownership by govern ment and the leasing program, Mr. Minister. MR . USKIW: Well, I•ve already made the point that the government isn•t interested in owning the land and that, if it does, it will only be because some people don•t exercise the right to buy it.

So that is not our decision as a government, whatever the government may be at any given time ; that is a decision of the private individual . Itt s a voluntary program. Itts optional. MR . VANDEVE LDE: I know, but in past times we have seen the price of land going up and down, and we know that for sure that when the price of land goes down after the time that you purchase it, the guy is going to have to be awful strong on his feelings about where he lives or else he won•t purchase it.

Because if he can ge t adjoining parcels at any amount lower, there•s no reason why he would buy your land, and you can eventually in this system build up quite a land holding. MR . USKIW: On the other hand, he may decide to continue his lease and exercise his option at another time where he wouldn •t have to pay back the subsidy. Itt s a flexible thing both ways, quite frankly.

Now, you alluded to a specific experience but you are not prepared to indicate to us what it was that you base your political considerations on , or where you allude that there might be politics involved, Are you aware of a document that was produced by the previous government whi ch, in fact, was a research document put together by a group of civil servants, the Treasury Board document of 19 68, where, in fact, it was suggested that that is in fact how government should function, it should relate only to the political needs of the government in power. Are you. aware of that? MR . . . . : That proves his point.

MR . USKIW: Well, I know that it proves his point but I wondered whether that• s what he was alluding to when he mentioned past experience, and I have a copy of it he re, You can have it if you wish. Itt s the most astonishing revelation in my lifetime , sir, as to how a political party would abuse its power, and I can assure you that the political party in power today would never resort to that kind of thing . --(Interjections) -- MR . VANDEVEL DE: Now okay, Mr . Minister, Mr . Chairman ... MR . CHAIRMAN: Thank you. I shall chair it here until the gentlemen sett le down. Proceed, MR .

VAND EVELDE: You were wondering if I knew where political favouritism may have occurred, Well, perhaps with the new program, our Autopac, I can only say when new programs start off it' s a little bit easier to appoint people in higher positions , When older programs are in effect, then W s pretty hard to have new political appointments , so to speak,

534 February 21, 197 5 (MR. VANDEVELDE contrd) But I think in new programs there is this possibilit y , Now just for one incidence here, we have an Aut opac representative who seems to carry a lot of weight, going around to different Autopac agents, and I suppose it was a coincidence that he was an NDP but he made no shortcomings of letting his feelings be heard1because he was at a local Autopac office .

I• m assuming of course that he got put into the position wit hout any refer ence to the fact that he was NDP but, in my opinion, this is a case that something could happen along these lines and that• s why I mention in the brief that it was a poss ibility, and I don• t think it can be overlooked. MR . USKIW: Were you aware, sir, as to how the Autopac agents were appointed ? The formula that was used ? MR . VANDE VELDE: No, MR . USKIW: If you were aware, you would perhaps not make those observations. There was a formula • • . MR . VAND EVELDE: I wish, Mr.

Minister, we were aware more of what' s going on in policy because I also was n•t aware of when MACC was changed from their mortgage lending to this land buying and leasing program, Why are we not aware of these programs before it happens ? MR . USKIW: Well, let me then ask you, how long have you been farming ? MR . VANDE VELD E: Oh, for about fifteen years, MR . USKIW: Did you not receive a document from my office , or my department, indicat ing all of the changes in programs, the new programs introduced about two years ago, where this was included and explained ?

Every farmer in Manitoba got one or should have got one. There were some 35, 000 mailed out, one to every farm household , Jt!s never been done before, incidentally, I was accused in the Legi slature of playing politics by telling the people of Manitoba what the programs were when that document was mailed ou t, MR . VAND EVELDE : Ws too bad it was n•t mailed out because a lot of that stuff I • MR . USKIW: Oh, it was. MR . VANDE VELDE : .•. file under 'G" and , .• MR . USKIW: Oh , it was mailed out , MR . VANDE VELDE : Did it come in a nice letter wit h a sealed envelope • . ? MR .

USKIW: It came in a very attractive colorful brochure form, but my colleagues to my right thought that that was a wrong thing • • • Here, this is the one here. 35, 000 went out explaining all of those programs , So, you know, I think we have tried to communicate to some degree . MR . VANDEVE LD E: Did this just go out recently ? MR . USKIW: That went out two years ago, sir , What was the date , Mr. Chairman ? MR . CHAIRMAN: May I see that please ? MR . USKIW: You know, one of my problems is that not everyone explains the govern ment• s programs as they are, and I don•t know why some people choose not to do so .

Some do because they don•t know the difference, others do because they know the difference. That• s one of our problems in communication , MR . CHAIRMAN: It doesn•t give the date but the Programs for Progress is the title and, Mr.

Vandevelde, I might mention that in 1970 to 1972 the committee or rather these members today were members of an agricultural committee that held meetings for the first time , as far as I know, in the history of Manitoba, throughout the various farming communities of the province, to bring to the attention the problems of rural depopulation, to get that type of information from the people , and there was some legislation to that effect.

Again, in the same period of time , there were some 20 meetings held with respect to municipal affairs dealing with the local government districts throughout various parts of the province, MR . . . . : What has that got to do . • • ? MR . CHAIRMAN: What it has to do is the statement that this is not brought to the atten tion of the people . The fact is that this government, for the first time , has been going out to try to get the response from the various communities in the rural parts of the province and this is what this exercise is about, We•re getting your presentation, your views.

To say that we have not been responsive would be incorrect, Thank you, Mr. . . • MR . USKIW: Mr. Chairman, I just wanted to conclude my remarks. I simply wanted to point out that this brochure should have been kept, if only as an informational piece , because wit hin it were listed the various programs, the various departments or branches of the - -

February 21, 1975 535 (MR. USKIW cont•d ) ..••. department, the people in charge of those programs in the City of Winnipeg, throughout the regions and their phone numbers, so that if anyone wanted informa tion on any program it was made very handy for the m. MR . VANDEVE LDE : Okay, Mr . Minist er, I would like to commend you for that type of a thing because this is what we do need.

And as well as tha t, I would like you to perhaps remember what I said about our agricultural representative s, that we do have confidence in them, we do like to refer to them when things like this come up , because they usually are much closer connected to government than we are. If new policies come out they•d be the first to know about it. So just keep them in mind because we do drop in their office quite often. MR . USKIW: Well that is a standard procedure , sir . MR . VANDEVELDE: Well it was n•t in this case . MR . USKIW: In which case ? MR . VAND EVELDE: In this case of these hearings.

Some of these ag reps knew nothing at all about it, MR . USKIW: These hearings are not the responsibility of the Department of Agriculture , they•re the responsibility of the committee of the Legi slature wherein there is no program or policy but where we are searching for policy answers. MR . VANDEVELDE : I know, but the point is .. . MR . USKIW: You know, you can•t confuse the two , sir . MR . VANDEV ELDE: I•m not trying to confuse it.

The point is that it's of real concern to farmers , and agricultural reps are looking after concerns of farmers -at least it was a few years ago and I hope that hasn•t changed, because ... MR . USKIW: Let me assure you that if our ag reps and all of our field staff were not aware of these hearings and these discussions , then I•m going to be a very disappointed person that my staff isn• t at all interested in what• s going on, MR . CHAIRMAN: Mr. Johannson. MR . JOHANNSON: Yes, Mr.

Vandevelde, you have felt free to make some pretty harsh critici sms of the government and the committee, and I find your atti tude frankly a bit puzzling. You express shock over the fact that committee members you say had some mocking questions for people who made presentations before our committee. Now, is your idea of democracy that you should be able to say whatever you want about somebody else of whom you disapprove or whose policy you don• t like , but they shouldn•t have any right to question you or reply ? Is this your idea of democracy ? MR . VAND EVELDE: Okay, Mr.

Johannson, I•ll reply to that before you confuse the question any further. If we wouldn •t have had that much of a waste of time we may not have been here tonight. My cows are still not fed, But • • • MR . JOHANNSON: Well you were the one who raised this, my friend, and if you• re talking about mocking you•ve been indulging in a great deal of it tonight in a very, very rude sense ... MR . VANDEV ELDE: And I•m saying to you, Mr. Johannson, I•m saying to you that there is a difference between constructive questions . • . MR . JOHANNSON: I agree. MR .

VANDEVE LDE: .•• and running up and down a guy one side over and down the other side , MR . JOHANNSON: What have you just been doing before this Committee ? MR . VANDEVE LDE : I• m presenting a brief of the feelings of the people in my area, MR . JOHANNSON : You have just threatened violence. SOME PERSONS : Oh-h-h. Boo. MR . JOHANNSON: The last statement ••• MR . CHAIRMAN: Order please. Order please . MR . JOHANNSON: Now, Mr . Chairman, you know, that sort of response isn•t going to engender any greater respect in me when people react that way.

The area I come from, the Interlake , is a rural area also, and an audience there would not behave in that sort of fas hion. They have a certain degree of hospitality which this audience doesn• t seem to have . MR . CHAIRMAN: Mr. Johannson, I believe you have questions ? MR . JOHANNSON: I do, if I can get to them. Now you have expressed what I can only call a very violent opposition to government ownership of land, and you say that private indi viduals should own the land, so I assume you are a free enterpriser, are you ? You•re a real free enterpriser ?

536 February 21 , 1975 MR . VANDEVE LDE : Yep. MR . JOHANNSON: And yet, you know, in this parti cular area of the country, unlike the area from which I come, the vast majority of MACC loans have been made in this area. These are subsidized by the taxpayers of this province. MR . VANDEV ELDE: That• s why we want to use them. MR . JOHANNSON: So you want subsidies from the rest of the province. That• s your version of free enterprise, is it? MR . VAND EVELDE: No, I• m just saying if we•re paying for them then maybe we should use them. MR .

JOHANNSON: But the thing is that the taxpayers of the entire province are funding this parti cular program but the benefits seem to have been concentrated largely in this area. Now this is the area you say of great free enterprisers. This is your version then of free enterprise, making use of subsidies from the taxpayers of the province. MR . VANDEVEL DE: Mr. Chairman, can I reply to the question ? I sort of lost it a litt le bit back there but you were talking about MACC, and I think that if you pass my brief on to Mr.

Johannson, we are in favour of low interest rates because we do believe that young farmers should get a chance of starting to farm. There is nothing wrong with MACC or FCC. If they•re duplicating things perhaps one of them should be cut. FCC likely wouldn•t be, but the point is that if FCC isn•t giving low enough interest rates to suit your government and us , then perhaps you should be keeping MACC with lower interest rates, but we•re maintaining that they will own the land themselves and because of it they•ll be that more aggressive, they'll have more initiative and what have you. They'll be private owners.

MR . JOHANNSON: So you think that an aggressive , hard-driving free enterpriser is one who gets subsidized interest rates from my constituents in the city . MR . VANDEVELDE : No, but I•m worried about your point of view. You want to promote smaller farms ? MR . JOHANNSON: No . MR . VANDEVEL DE: You want to promote new • MR . JOHANNSON: No . Frankly, from the feedback that we•re getting here, I•d be quite willing to cut back on a lot of agricultural programs, if you simply list the programs that you want the government to get out of. MR .. .. : Autopac. MR. JOHANNSON: .. . about agricultural programs.

One final questio n, Mr. Vandevelde. If you are so concerned about political favouritism and government domination, why don't you just go buy your land from a private individual and use the bank? Then there 's no danger of government interference. Why don't you go to Mr. Blake's bank and borrow the money ? MR . VAND EVELDE : I•m not worried about that. Itrs the young farmer who maybe doesn• t have the finances.

I am worried about him because I think he should have a chance to get started, and I hope that all of you on this agricultural committee should keep this in mind, that we do want to have young farmers keep farming and have a chance to farm. If they have the qualifications, why not ? But the point is, how do we go about giving them this chance ? We , as a group in our area, just felt that your White Paper here promoting buying up land and leasing it out to them can lead to something that maybe we don• t want. Maybe it can get out of hand.

I think we•d sooner stick with MACC as it used to be, with low interest rates. MR . USKIW: On a point of order, Mr. Chairman. I think the gentleman has misread again the intent or the purpose or the make-up of the Committee. I simply want to correct him. This is not an agricultural committee , sir ; this is a committee of the Legislature . MR . VANDEVELDE: Okay, I•m not concerned about details like that. Itrs the principle of the thing, land ownership . MR . USKIW: No , no. The paper you•re dealing with is not a White Paper, it is a Working Paper. There•s a big difference. There•s a difference.

It has nothing to do with politic s. MR . CHAIRMAN: Thank you, Mr. Vandevelde . Mr. Gaut hier, Notre Dame de Lourdes. Order please . You may proceed. MR . GADT illER: Mr. Chairman, members of the Legislature , ladies and gentlemen. Regarding the government land policies, some years ago I presented a brief in Carman to a Standing Committee on Agriculture concerning the Manitoba farmer, which ended something - - -

February 21, 1975 537 (MR. GAUTillER cont•d ) . , .• , like this. "Never in the hi story of the west has the farmer been made to give up so many of his freedoms . Never in the hi story of Confederation have ·so few been made to give so much to so many for so litt le ." Our parliamentarians , I fear, would like to add to their list of "T hou Shalt Not" the following: Thou shalt not sell or buy agricul tural land in Manitoba without the approval of the Department of Agriculture .

It would seem that in some strange way they fear that foreigners are interfering through the acquisit ion of farmlands in our rural way of life ; that too much land is being bought by these foreigners . I would like to mention a few of these things that interventions by Acts of parliament to the free trade of farmland would harm. It would stop badly needed foreign capital from entering Manitoba and thus our economy.

It would deprive many of our retiring farmers from getting the maximum from the sale of their lands, and in many instances the lack of buyer competition would mean the difference for a retiring farmer between being self-supporting and the necessit y of public financial assi stance . I feel that there is no cause for alarm at the amount of foreign bought land. If I may, I would like to go back in hist ory to the beginning of colonization of Manitoba. The Hudson• s Bay, the Northwest Land, and other subsidiaries of parent companies located outside of Canada owned vast tracts of agricultural land in Manitoba.

These companies were soon to realize that in order to profit from these lands they had to be sold. History repeated itself in the era known as the "D irty Thirties" where, through lack of markets, many farmers were unable to meet their financial commitments , and corporations such as Trust and Loan, Credit Foncier, with parent companies in England and France, found themselves holding large holdings of agricultural land , paying taxes and receiving no revenue . They were as happy as the farmer to see the rains fall and witness the improvement in the market.

The lands were once more off their hands and in the possession of the farmer. It is strange that every time a socialist government is offering its help to agriculture , it is at the expense of the farmer• s freedom. In this instance I fear regimentation of the sale of farmland. There are many areas in which the government could help make farming more attractive without regimentation. I would like to mention but a few of these possibilitie s. The tax area.

I believe it is entirely possible to exempt from income tax , revenue that a farmer use s to purchase farmland, and that the financial impact on public revenue would be very very minimal. The removal of succession duti es collected through the inheritance of farmland. The removal of the Real Property School Tax, where the farmer at present is made to pay more than his fair share of the educational expense .

It is revolting for a farmer who is paying $1, 500 to $1, 800 a year in school tax to realize that a doctor or a lawyer in town, hav ing an income subsequently larger than the farmer, is paying approximately no school tax at all . Research , Through the improvement of swine , dairy, beef, we could make agriculture more competitive , and so , more attractive . Research in the field of cereals, wh ich would bring about grains that are more adapted to our soils and climatical conditions.

Research in the field of agricultural machinery, where the government could have testing stations and data and reliable information available before the purchase of agricultural machines. The forecast of agricultural markets. This could be improved immensely. In the past, the non-farmers, so-called agricultural government experts on the sale of agricultural produce , have established quite a record as devisers of worthless advice which has cost the farmers millions of dollars .

In my own experience I have found out that when advised by our govern ment to increase my beef production, that it was time to phase out the operation. The same can be said of pork, eggs, grain, etc . I• m sure it is entirely possible to ensure the producer receives sound and reliable information wit hout added expense to the taxpayer. However, our government chooses to go into business. They become purchasers of agricultural land. They become competitors on the land market and so are direct competition to the farmer, who is made to compete against his own tax money.

If this new venture is no more success ful than other business ventures entered in by them in the past, it will be a genuine flop. I could not help but think of Saunders and Flyer where millions of tax dollars are being pumped in annually, and Autopac and its unknown cost to the taxpayer, and I wonder if the day is not coming when a farmer will, through Acts of parliament, be barred from

538 February 21, 1975 (MR . GAUTHIER 'Jont•d) •••• ,owning his own farm. What has happened to the Russian agriculture could repeat itself in Manitoba; that we , through lack of private ownership and lack of interest by the farmer in his communal farm work, could make us importers of the very produce we are now exporting. Or will our socialists become non-socialists, as they are when questioned about the prices paid by Japan regarding their contract wit h our Pork Marketing Board ?

Regimentation of the marketing of agricultural land would only add one more bar to the already imprisoned primary producer, and help make us no freer than the inmates of Stony Mountain. In any event, I think the farmer should retain ownership of his farm and definitely, very definitely, the government should abstain from entering in the markets of agricultural land. Thank you. MR . CHAIRMAN: Thank you, Mr. Gauth ier, Mr. Us kiw. MR.

USKIW: Yes, I should like to ask you, sir, whether you feel that the Department of Agriculture should reduce its budget very significantly so that we wouldn• t be guilty of giving you all that bad advice. Should we fire half the staff or three quarters of it or what should we do ? Should we scrap the department, is the suggestion here . MR . GAUTHIER: I feel, Mr. Uskiw, that we•re entit led to as much government help as the taxes that we are contributing . MR . USKIW: No, but your suggestion is that government advice and help in the Depart ment of Agri culture has been worthless.

So I would think that you would be money ahead if we didn•t have it. MR . GA UT HIER: When I bought cows at $5 00 and sold them for $2 00 on their advice-- ! think I•d have been further ahead. MR . USKIW: Did the government tell you that your cows should be sold for $200 ? MR , GA UTHIER: Cows don•t live forever. They have to be sold some time. MR . USKIW: No, but the government doesn• t determine the price of you

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Collection	Manitoba — Debates (Hansard)
Citation	30-2-lo10
Type	hansard
Volume / chapter	30th 2nd hansardpdf lo10.pdf
Language	en
Format	pdf
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