The Rural Voice, 1986-06, Page 84QUESTIONING
QUOTAS
Canadian farmers who belong to
marketing boards with production
quotas have always been irritated
by what they consider the
hypocrisy of critics such as tenured
professors claiming that marketing
boards are too restrictive.
However, that's nothing compared
with the latest, and probably the
most dangerous, critic to emerge.
Darcy McKeough, the former
Ontario treasurer, recently com-
mented that quota -controlled
marketing is not productive
enough and does not provide
enough competition. What makes
this ironic is that Mr. McKeough is
president of Union Gas, which has
a complete monopoly on natural
gas distribution in southwestern
Ontario. What makes this
dangerous is that Mr. McKeough is
a member of the Neilson Task
Force, the group set up by the
federal government to look at
government spending.
The danger is not so much that
the Neilson Task Force will change
the government's policies itself,
but that it might weaken the
government's resolve to defend
marketing boards if free trade
negotiations go ahead.
Most of the criticism of
marketing boards can be easily
disproved by fact. For example,
even with marketing controls, last
year the price of eggs fell by six or
seven per cent. How many other
things in the Canadian economy
fell by more than six per cent. In-
deed, at a time when farmers were
faced with ruinous prices for red
meat, the price at the butcher's
counter continued to climb. Over
the last decade the price of
production -controlled items of the
food basket has increased less than
the price of non -controlled items.
During that time farmers involved
in those commodities lived rather
controlled lives, having to run effi-
cient businesses but not having to
worry whether they'll go bankrupt
the next year.
During that time, too, the
various governments probably
spent less because they didn't have
to come up with emergency
bailouts or stabilization plans.
So, marketing boards are
generally in a good position to
demolish the arguments of people
like Mr. McKeough. However,
there is one weakness in the
arguments of the marketing
boards: the price of quota.
There are plenty of other
precedents for the right to do
business having value. The limited
number of seats on the stock ex-
change means that they have high
value. Radio and television chan-
nels that use the very limited open
channels in the government -
controlled airwaves have great
value. Even the possession of a taxi
licence in a large city can be like
having a piece of a gold mine.
But quota value in farming goes
against one of the strongest farm
myths — that anyone has the right
to grow food on their land. Quotas
were set up as a way to save the
family farm, but placing value on
the cost of attaining quota has had
the reverse effect: it has tended to
concentrate ownership.
We express concern about bring-
ing along younger farmers, but, if
an inspiring poultry operator has
to lay out $1 million for barns and
quota just to get into the business,
how many young people are going
to want to farm? Instead, some
well-established producer will like-
ly have the money to buy the
quota. We worry about big
business being involved in farm-
ing, yet we're turning farming into
big business.
Valuable quotas are the
Achilles' heel of supply manage-
ment marketing boards. Unless
producers themselves tackle the
problem, they're going to give peo-
ple like Mr. McKeough the target
they need to destroy the system.
And then how much will that
quota be worth?D
Keith Roulston is the originator
and former publisher of The
Rural Voice.
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JUNE 1986 83