The Rural Voice, 1985-09, Page 11straits, it's not surprising that many
farmers look to parity as "a quick
fix."
"I can understand why a fix is
desperately wanted," he adds.
In his research, Bradley found that
a 1978 United States Department of
Agriculture study predicted that a
switch to parity pricing for all farm
commodities would certainly boost
net farm incomes but would also hit
consumers very hard. The USDA
study forecast a 20 per cent jump in
retail food prices the first year parity
was implemented.
Bradley also notes that while the
American government did legislate
parity for some commodities, the
price supports or income stabilization
was tied to 70 per cent of parity.
There was never American legislation
that guaranteed the producer 100 per
cent of the indexed price, just as in
our Canadian experience stabilization
programs have never guaranteed
farmers the full price for product.
Bradley is now trying to put
together more information on parity
in the Canadian context. While he's
cautious about commenting on the
U.S. parity experience, he notes, "If
it had been a useful instrument of
U.S. policy, I think we would still see
it in effect." The problem with rely-
ing too much on the American parity
formula, he adds, is that the 1985
economy is "a dramatically different
beast" than it was in the 1940s.
The OFA directors will continue to
wrestle with the parity issue and other
means of ensuring fair returns for
farm products for the next several
months, says Bradley. While parity is
often discussed at farm meetings in a
"very emotional context" (sometimes
with an almost evangelical fervor, it
might be added), Bradley says that
the OFA wants to look at the case for
parity "dispassionately, with more
deliberation," but Bradley's initial
findings have been that legislated
parity could force land values up and
that most of parity's benefits would
go to the current generation of land-
owners. Parity wouldn't resolve the
problem of bringing new producers
into the industry. Also, further
research may prove that a supply
management system, like the Ontario
Milk Marketing Board policy of ad-
ministered price and production con-
trol, is more beneficial to assuring
fair farm gate prices in the longer
term.
While parity has never been part of
Canada's legislative history, veteran
Saskatchewan New Democratic Party
MP Lorne Nystrom (Yorkton-
Mclville) wants to change that.
Responding to requests from hard-
pressed farmers in his riding, two
years ago Nystrom sponsored a
private member's bill guaranteeing
profits for farmers in certain com-
modities. His first bill was lost in the
changeover from the Liberal to Con-
servative government. Nystrom sub-
mitted the parity proposal again and
on April 25, 1985, Bill C-215 survived
its second reading. Now the bill is
waiting for a hearing before the
House of Commons' standing com-
mittee on agriculture. Both Ontario
farmers and western Canadian farm
groups have stepped up their lobby
asking the government to hold public
hearings on the proposed parity
legislation.
Stated simply, Bill C-215 would en-
sure that beef, pork, and grain sold
domestically for human consumption
(feed grains are excluded) would be
priced at levels which would return
the cost of production to the farmer
and guarantee him a profit.
Remembering that the bill was
originally drafted to fit the western
Canadian situation, grain (wheat,
oats, and barley) would still be priced
and sold through the Canadian
Wheat Board (and Ontario Wheat
Producers' Marketing Board). The
red meats would be sold and
marketed by national marketing com-
missions which would be operated as
voluntary organizations for five
years. After that period, Bill C-215
provides for a vote by farmers on
whether or not to change the two
commissions to marketing boards
with mandatory powers.
on the U.S. formula since "it isn't
possible for us to graft American
history onto the Canadian ex-
perience." He has spent much of his
time calculating how legislated parity
might affect food prices as urban
MPs and consumers are going to
want to know how the proposed
policy will influence food costs.
Because the 1935 Canadian Wheat
Board Act can control the imports of
grain and bakery products into
Canada, even if parity increases
bread prices by approximately 10
cents a loaf, as Coyle predicts, the
U.S. can't flood the Canadian market
with cheaper products.
The same protection doesn't exist
against red meat imports. Also, Coyle
says, "I have not sensed in either of
those commodities that we are quite
ready in Canada for orderly
marketing." That's why Bill C-215
suggests the five-year voluntary pro-
gram of orderly marketing overseen
by commissions. But parity would
mean higher meat prices for con-
sumers and that could mean "a
significant contraction in the in-
dustry" as people switch to chicken
or other protein sources.
For example, basing his calcula-
tions on the Saskatchewan Assured
Hog Returns program, Coyle
estimates that pork prices would in-
crease 30 cents per pound. "If we're
looking at $2 per pound for bacon go-
ing up to $2.30 per pound, that's a 15
per cent increase. When you look at
the way cars and many other things in
life have jumped in price in the last
Nelson Coyle, research assistant to Saskatchewan New
Democratic Party MP Lorne Nystrom: "I think the farmer
would rather make money on 75 cows than lose money
on 100."
Nystrom's research assistant,
Nelson Coyle, has spent many hours
researching parity. Coyle says the
very fact that a private member's bill
survived second reading "suggests to
me that there are people in govern-
ment ... who would like to see a
debate about cost of production."
But he's well aware, despite
Nystrom's discussions with
agriculture minister John Wise, that
another issue, such as plant breeders'
rights, could put the proposed parity
bill on the backburner for several
more months.
Unlike many Canadian farm ac-
tivist groups who use the U.S. parity
experience in their lobbying efforts,
Coyle has tried not to rely too much
few years ... I don't really think that's
an exceptional cost."
But if consumers are likely to adapt
to increased pork prices, the picture
for beef isn't quite as promising.
Coyle, again using the Saskatchewan
situation, estimates that to give cow -
calf operators as well as finishers a
profit, beef prices may have to rise by
as much as 80 cents a pound. That is
what might cause increased chicken
consumption and a re -adjustment in
the beef industry.
But, adds Coyle, "1 think the
farmer would rather make money on
75 cows than lose money on 100."
Then, because a parity bill also im-
plies controls on production, "what
agriculture has to come to terms with
SFPTE\II3FR 1985 9