The Rural Voice, 1978-11, Page 11Opinion (ated)
General farm organizations
have no place in quota policy
By Adrian Vos
"We as a farming community have not
faced up to the reality of the high value of
quotas. We can ignore this reality no
longer. It is a fact that the legislated rights
to produce or market a product, develops a
monetary value in our market economy. As
a result, those who dominate our market
economy will decide who will have the right
to produce or market a product," writes
Elbert Van Donkersgoed, the secretary of
f
the Christian Farmer's Federation of
Ontario in the house organ of the CFFO in
1977.
He goes on to complain the injustice of
the quota transfer system. He says
particularly that new producers face entry
difficulties because the cost of barns and
equipment (equity) is already high com-
pared to established producers of a given
commodity. For that reason he sees the
large corporate farms and the vertical
inte grator growing steadily, while the
smaller producer will slowly fade away.
He advocates planned quota transfer.
"That means a decision process for
deciding who can stay in the industry. For
example we can think of a number of sound
reasons why certan producers (vertical
integrators etc.) should be phased out of
the egg production industry." He wants
the door open to new family farmers and
restriction on expanison by existing
farmers and restriction on expansion by
existing farmers. Also he feeds a value
should be set on the quota price, just high
enough to pay for the administration cost.
Echoed
This sentiment was closely echoed by
federal Ag. Minister Eugene Whelan. In
correspondence with the CFFO he said that
rules have to be set to "govern the
distribution of quota, because the demand
for it at the lower prices would almost
certainly be greater than the available
supply of quota."
He went on to admit that there is no
relationship between quota price and quota
value. The value would remain high
regardless of the price. Mr. Whelan gave a
possible solution to the quota value
dilemma. Let the price be determined
in the free market, he said but include it
somehow in the cost of production formula.
Ifthe free market price becomes too high,
it shows that the cost of production formula
is too generous. In that case adjust the
formula down until the quota price is right
again. If it is too low, reverse the process.
Becau s e of a general dissatisfaction with
quota transfers, and the lead the CFFO has
given in protesting the system or the lack
of it, the Ontario Federation of Ariculture
(OFA) has been forced to take a good look
at the issue, much to the chagrin of the
farmers now producing under a quota
system.
What Right?
T:he question these farmers ask is:
"What right does a general farm or-
ganization, be it OFA or CFFO, have, to
meddle in the policies of a commodity
group? We produced when the price was
low, and now that we have our house in
order and make a living, everyone wants a
piece of the action. We have a democratic
organization and every producer of our
commodity haste right to vote."
At the September meeting of the Huron
Federation of Agriculture (HFA) Gordon
I -fill of Varna, maintained that the
organization have a right and a stake in the
supply management boards, because the
actions of a supply management board
today, if used wrongly, can prevent . the
farming of a future supply management
system for other commodities.
The panel members at that meeting
didn't accept that argument, and most of
the 50 or so members present let that
argument go by without comment, sup-
portive or otherwise. To us it appears to be
at best a tenouous argument. A cash crop
farmer voting on matters pertaining to
dairy?
Difficulties
The subject on the agenda was the
difficulties of quota transfer, particularly
the obstacle to a newcomer to the
commodity. Ken Crawford, chairman of
the National Turkey Marketing Board, Jim
Drennan speaking for the Milk Board, Bill
Scott representing the Egg Board and
George Underwood for hte Broiler Bo ard,
answered questions from the audience.
They unanimously rejected the notion that
no one could enter their commodity. Mr.
Crawford said that anyone who wants to
buy quota gets full credit from any bank,
because the banks recognize its value.
The CFFO doesn't just criticize the
boards, but puts alternatives before them.
In 1977 they presented a brief to the
chicken board, asking them to prevent
large chicken farms from expanding
further. Instead they wanted the quota to
goto smaller farms until they have a quota
of 10.000 birds. They also wanted
non -farmers removed from the farm
production scheme.
Feed companies. hatcheries and proces-
sors should be out of the farm production
business FFO says and few farmers will
quarrel with that. CFFO wants a new
producer to be let in, for everyone who
leaves the business. That new producer
sbuld be Tess than 36 years old and have a
at least four years experience in agricul-
ture. However, they refrained from saying
how the new candidate will be selected and
who will do the selecting.
Tribunal
John Van Beers, Executive member of
the HFA, would like to see a tribunal set up
to administer the allocation of quota. I just
wonder who will be brave enough to sit on
such a tribunal. After all, most of the
applications for quota will have to be
turned down.
Mr. Crawford rejected the notion that
quotas tended to transfer the production of
a commodity into integrators' hands. He
said that just because of this concern, the
Turkey Board has set a maximum of two
million pounds per producer, and this is
tied to the property where the barns are. It
appears however that this quota is too high
or that the board moved too slowly, for
today the country's turkey production is in
the hands of about 700 producers.
The Egg Board is not much different or
is going that way. All Canada's eggs are
produced on some 2500 farms. Mr.
Van Donkersgoed's fears have quite a few
facts to back him up.
However, all proposed solutions seem
too simplistic. One milk producer at the
FIFA meeting just wanted extra quota, for
his son had entered the business. That is
understandable. But from where is the
quota to come? From those selling out? But
doesn't the milk producer w ho had to cut
back two years ago have previous rights?
Should the Milk Board simply give extra
quota? But the quota is only as big as the
market can absorb. Any surplus must be
sold at a loss, usually overseas, at the
expense of the established producers. Is
that fair?
Panic?
From where I sit, it seems that the
general farm organizations would do better
to confine themselves to general concerns
and leave the specifics to the knowledge-
able people in the commodity or-
ganizations. They really don't know about
the pitfalls of the various quota policies.
The OFA has a Commodity Committee
where a subcommittee is studying the
problem of quota transfers. It appears as if
the OFA has ignored its own committee
and has panicked in the face of CFFO
pressure.
THE RURAL VOICE/NOVEMBER 1978 PG. 11