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The Rural Voice, 1981-11, Page 8.0 .2 wV L. E E O V v E 0 LL ■ 0 1 1 ■ V ■ cn z O 1 La W W z W a 527-1858 after six i 0 number of dairy farms is attributable to quotas. He thinks general consolidation is taking place, a consolidation which would have occurred anyway. Thompson agrees. When considering the egg producers who sold their quota soon after supply management was adopted there, he thinks many egg producers didn't have a viable operation in the first place and were still not viable with quotas. "One thing the quota system normally does is reduce supply of the product to hold the price up. By reducing supply they have to reduce the production of each grower, "he says. "Some then were not viable and chose to sell off their operation. These were probably not viable before or after quotas. In the early years of implementation you find the number of producers drops and it takes a number of years for the production system to adjust to the point where it stabilizes." Frayne says quotas make it easier for banks. But he finds such an approach short-sighted. He says in the end, the money has to come from somewhere and one can't keep on guarantteeing everyone a fair return on their endeavors in a normal functioning free enterprise system. Ray Hanna, a former dairy farmer of Auburn, in Huron County is bitter about what the supply management system did to him. He was dairying when the quotas were first issued. This first quota was free. However, when he had to suspend operations because of sickness, he had to turn back his quota when he sold his cows. After recovering from his disability. he found the quota he had given back, free of cost, now had acquired a value. To get back into the business he had not only to buy fresh cows, but also a quota. This he couldn't afford and it put him in the same position so many young farmers find themselves in today. The dairy industry is effectively closed against them. Frayne thinks this is one of the problems the milk boards have to address themselves to: "If a young man wants to enter, his father or his family has to absorb some of these costs. This also keeps the average size of the dairy herd small." he says. "The average US herd is compar- ably larger than ours." In the first ten years, Frayne doesn't think quota was a significant factor in dairy cost of production. In the last year and a half quota price has gone up dramatically and now is restrictive in capitalizing and operation. But the true effects are still to come. Emma Franken , who farms with her sons in the Auburn area, is also concerned about the cost of quota. She finds that a young fellow has a hard time getting PG. 8 THE RURAL VOICE/NOVEMBER 1981 started in dairy. "Olikof my sons is in that position. He's renting everything, land, some machinery and quota, and he's having a heck of a hard time trying to make ends meet. But he's also had to buy some machinery. So, even if he had free quota, he'd still have a hard time making ends meet." Mrs. Franken says you have to be efficient. "If you have a cow that milks only 7 or 8,000 lbs. a year, you have to feed a lot more cows than when you have 14 or 15,000 lbs." She has her doubts about the milk board statements that the cost of quotas is not reflected in the cost of production formula. "If you buy your land and your cattle and your quota, that will have to be paid out of your milk too." This is exactly what the ECC people said. Both Mrs. Franken and Les Frayne agree the increase in the size of dairy farms is mostly because farmers want to have some time off. In a two family operation this is possible. Comparing supply management systems with free enterprise systems like beef and hogs, Frayne thinks the financial difficulties in those commodities are partly the result of the freedom those farmers enjoy. Freedom to produce; freedom to market; freedom to pursue the industry in the way they prefer. "Not everybody is going to be success- ful in a wide open system like that." Changes will have to be made, he maintains, but not necessarily to supply management. It could well be that the high cost of grain fed to cattle may not be justified on economic grounds. And that the dropping consumption of beef signals to the industry that people are not going to pay a disproportionate amount of their income for beef. Frayne welcomes the studies going on in the marketing of cattle and he thinks that beef marketing problems are on the brink of being sorted out. But he thinks production methods have to be looked at first. If grass-fed cattle can be made acceptable to consumers, perhaps a marketing board is not necessary. First things first. Commenting on the attitude of the ECC. Mrs. Franken sums it up: "I think this country has the wrong philosophy on producing food. We could produce so much of our own food here if we wanted to. It gives a lot of work to a lot of other people. I know a teacher who thinks we would be much better off if we didn't have any farmers and just imported it (food) And that's such a stupid philosophy for a world that is already so short of food. Canada has all this land and can grow so much. It is the same thing if we closed the teachers' colleges and imported the teachers."