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The Rural Voice, 1980-07, Page 16VOICE OF A FARMER Stabiization needed, not quotas BY ADRIAN VOS Quotas or not quotas is a hot topic with many pork producers in Ontario. Since a big percentage of all hogs produced in Ontario come from our area, it seems that a discussion of the merits and demerits of quotas is in order. The advantages of a supply management system that sets a price for the product based on the cost of production plus a profit seem on the surface very attractive. No more worrying about rising input costs. No more worrying about dropping prices. All this would be corrected so that the pork producer still would maintain his income per pig delivered. Of course it would also mean that when prices in the USA reach highly profitable levels, as they did not too long ago, the Canadian price would be lower. In this discussion I assume that every producer understands that a separate provincial quota is an impossibility, and that the American border must be closed against imports when their price is lower than ours. Now let us further assume that the quota be established at the sow level. It has become accepted practice that allotted quota will be on a historic basis. This means that the average production of the last number of years will be used as a basis. If that period is set at five years, the producer who has been in business for only three years would get a quota three-fifths as high as his barns can hold. The five year man would get a 100 per cent quota. If the quota came into effect two years from now, the new producer , who scrambles to build a barn quickly, or who fills an old barn with sows, would also get a quota proportionate to the time he was in business with his sows. Can he prove he had that many sows? Probably not, but can the five year producer prove how many he had through the years? PROBLEMS SOLVE') But let us now assume that all these problems can be solved. The first thing to happen is the closing of the border against imports and retaliation by the Americans, who of course will close theirs against our pork. Since we are selling more to them than we buy from them, the total Canadian quota must be smaller than it was before. Therefore all producers will only be allotted a percentage of their quota. If, for example, a producer was allotted a quota of 100 sows, he would only be allowed to have maybe 90 per cent or 90 sows. That would mean that the barn is not so efficient anymore, but at 90 per cent it's not too bad yet. The next thing to happen is that the price in the supermarkets would have to rise. After all, we demand more money, and they must also make a profit. Unless the beef producers also get a quota system, which seems to be highly unlikely, the price of beef will remain where it is, or maybe slightly buoyed up by the increased pork price. It is no secret that many consumers have turned to pork solely for its lower price, compared with beef. A closer price relationship PG. 14 THE RURAL VOICE/JULY 1980 would turn those people back to beef consumption. The result would be a lower total Canadian quota and subsequently a lower individual quota. The Ontario producer would have to cut back to a possible 80 per cent of his allotted quota. HURT? This is going to hurt. The new barns of the last ten years have been designed to be full, or nearly so. The mortgage has to be paid; the hydro bill is the same; the payment on the farrowing stalls has to be made, and so on down the line. Just about the only cost saving will be in feed. The result would be an inefficient farm. The return cost can't be passed on to the consumer, for cost formulas are based on an efficient production unit. Those established farmers with a line of credit would soon go around the country buying a number of small pork producers, adding the quota bought to their own, so their barns would be filled and remain efficient. The young farmer, who has already trouble meeting his payments at the bank,is stuck with a half filled barn. All the complaints that have been levelled against other supply management boards, that a younger feller can't get into farming anymore, will be repeated and will be truer than ever. If the industry was in danger of disappearing, like broilers and eggs, the story would be different, but any consistent producer of hogs, either at the sow level or at the finishing end, has had a decent average income over any three or four year period in the last 30 years. STABILIZATION All that is needed for the pork industry is a meaningful stabilization program. There is little disagreement among pork producers that the swings in income hurt, and that a newcomer to the business is hurt most. Pork producers have brought a great deal of foreign exchange into Canada, and a helping hand from those who have profited by this and by cheap pork, is not asking too much. As long as a city like Toronto alone is subsidized by us all to the tune of hundreds of millions of federal dollars, in their public transportation system for example, it doesn't behoove federal politicians to cry over S46 million once in eight years. That so much emphasis is coming out of Ottawa on quotas may be partly due to the fact that a staunch proponent of beef quotas, Barney Evans, is a member of the Liberal agricultural committee. That MPP Jack Riddell has reportedly been blowing the quota horn as well is harder to understand. I can only assume that he is supporting federal agriculture minister Eugene Whelan no matter what. The disadvantages of a quota system for pork are so many that they far outweigh the advantage of steady prices. If a general meeting of pork producers is to be held to discuss quotas, they would be well advised to attend and to hear all arguments before jumping on the bandwagon of that unlikely pair, Whelan and provincial Ag. Minister Lorne Henderson.