The Farmer Takes a Hand in World Affairs

THE FARMER TAKES A HAND IN WORLD AFFAIRS AN ADDRESS BY H. H. HANNAM, C.B.E., B.S.A. PRESIDENT, THE CANADIAN FEDERATION OF AGRICULTURE Chairman: The President, Mr. H. G. Colebrook Thursday, November 3rd, 1949

MR. COLEBROOK

Our guest speaker today has for many years been a great figure in the agricultural world--both nationally and internationally.

The notice cards give very little information regarding his quite remarkable career in that field, so I will briefly touch on the highlights.

From 1928 to 1943 Mr. Hannam held the following important positions

Secretary Treasurer of the United Farms of Ontario. Secretary of the United Farmers Co-operative Company.

Vice-President of the Canadian Federation of Agriculture; later being appointed President.

In 1943 when the Canadian Delegation to the United Nations Food Conference was appointed, Mr. Hannam was included in an advisory capacity and later with the Canadian Delegation attended at each of the subsequent conferences at Quebec, Copenhagen, Geneva and Washington.

In 1946 in the King's Honour List Mr. Hannam was' created a Commander of the Order of the British Empire--C.B.E.

In his spare moments he has written and published several books on this important subject.

I will now ask Mr. Hannam to speak on his chosen subject

"The Farmer takes a hand in World Affairs" MR. HANNAM

You might expect me to tell you that agriculture is our basic industry in Canada, and that when the farmer is prosperous everybody else is doing very well.

Say it this way. Many of you here represent big business, that is, so-called big business. The biggest big business in Canada is agriculture.

Farming is still the largest single industry in our Dominion unless you lump all manufacturing together and include the packing industry, milling and other processing of farm products.

There are more than one million workers engaged in agriculture.

But the fact of particular significance for our subject today has to do with the world market

For the past 5 years agriculture provided 30% of Canada's total exports.

Before the war (5 year period) agriculture provided 39% of total exports.

Exports are important in our national picture. Vital to our whole Canadian economy. If world trade breaks down you will realize the jam we'll be in.

This Dominion has its roots deep in the soil.

The production and distribution of food is perhaps the world's greatest problem today. Why?

Because:

Following is the message of one of the great men of our day-Lord Boyd Orr

"Hunger and poverty lead to social unrest and revolution. A successful world food plan can put the world on the road to permanent peace."

For his lifetime crusade behind that idea, he has been awarded this year's Nobel Peace Prize--a fitting recognition of his outstanding contribution to world history.

Ever since President Roosevelt took the initiative in calling the first food conference at Hot Springs (in 1943) world nations and statesmen have been trying to develop a world food program. And they are still working on it.

Some definite progress has been made and strangely enough farmers have had a hand in it. Plain everyday farmers have been contributing the benefit of their experience and their vision to world statesmen on the subject of "food and agriculture."

What the farmer has done and how, is, I think, what you may expect me to outline briefly to you today. Fourteen years ago this month farmer representatives from all nine provinces in Canada gathered in Toronto. They met to consider organizing on a national basis--and they organized the Canadian Federation of Agriculture.

Their aim was:

To establish a Federation which could speak with one voice for Canadian agriculture,

To enable farmers to play their full part in a capable and dignified manner in the affairs of the nation,

To make farm life and rural living compare favourably with that enjoyed by urban people, and to maintain a high standard of rural citizenship. That their efforts have been fairly successful you probably have heard. With all branches of agriculture and all provinces included, the Federation of Agricukure has an affiliated membership of some 400,000-approximately 60 to 65 per cent of Canadian farmers.

The recognition which has been accorded the Federation and its program prompted the Federal Minister of Agriculture to state in an address on one occasion last year:

"Never before in the history of Canadian agriculture has the voice of agriculture been more effectively and and unitedly expressed than during the past six years."

Once we established a national office in the capital, and our farmers, through conferences, advisory committee meetings and continuous contacts with Federal Ministers and senior officials, became thoroughly conversant with national policies, they realized more keenly than ever before how vitally important had international policies become in determining the shape of our agricultural program at home and the level of farm income. In fact they came to the conclusion that no agricultural country such as Canada could carry out successfully a stable agricultural program domestically unless that program harmonized with a jointly sponsored program by world nations in the international field.

This thought shared by the farmers in many countries, led three years ago to the holding of the first world farmers' conference in London, England, and to the formation of a farmers' international federation-the International Federation of Agricultural Producers. So it is that our Canadian farmers have joined hands with the organized farmers of 23 other lands and, ignoring oceans, are determined to work with them, TO:

Our Federation was honoured this year by being given the opportunity to act as hosts, at Guelph, to the Third Annual Conference of IFAP.

Now that world farmers have a voice, you may properly ask: what do they want and what do they recommend?

Our Canadian farmers want to put agriculture on a business basis.

Until the last five or six years our farmers had never enjoyed the satisfaction of producing for a known market and to them this is very important for the future. The farmer wants to know that the costs which he incurs from month to month will have a reasonably good chance of being recovered when his product goes to market at the end of the season, the next year or the year after that. In other words, farmers want some assurance of stability in markets projected ahead a few years to enable them to plan their production with confidence. With this view, we found the farmers of all countries in complete agreement.

This desire for systematic and stable marketing is basic in the reasoning of world farmers in recommending international commodity agreements, of which the International Wheat Agreement is a typical example.

At three annual conferences our IFAP came out unanimously in support of a wheat agreement. And there is reason to believe that such an agreement, which went into effect on August 1st last, would not have been achieved had it not been for the existence and support of our world farmers' organization.

Under this agreement five exporting nations undertake to sell and thirty-seven importing nations undertake to buy 456 million bushels of wheat (Canada, 203 millions) during a four year period with a top ceiling of $1.80 and a bottom floor of $1.20. This agreement gives wheat growers new incentive to produce without fear.

Another recommendation on which world farmers agree is that efforts should be made to insure reasonable stability in prices. Our farmers are not, nor ever have been, advocates merely of high prices. They believe that moderate prices in proper balance in the various sectors of our economy are best. They have seen unduly low prices ruin producers and unduly high prices create hardship for consumers and kill a market. They have been widely fluctuating prices bedevil market operations and destroy that confidence without which trade cannot flourish.

Consequently they believe in establishing a floor and ceiling price by mutual agreement, leaving a substantial margin between the two to provide optimum freedom for supply and demand factors to function.

In the wheat agreement there is a margin of 30 to 50 cents per bushel between agreed upon floor and ceiling prices. In recommending such agreements we are not advocating price fixing nor state trading. We are advocating international, i.e., inter-governmental, agreement to lay down rules within which trading can function freely, on a basis considered best for all concerned.

If the wheat agreement proves successful in the few years immediately ahead--years which are likely to place it under severe test--we will have discovered a new pat tern for world trade with tremendous possibilities for the future. If it doesn't succeed, well, it's not likely to be worse than the breakdown and chaos we experienced in the thirties. While it is a new idea, farmers believe it's worth trying.

One other matter of policy is involved in this program. It is that farmers believe in a policy of abundant production. They have not at any conference suggested restricting production in order to maintain profitable prices for themselves.

This policy of abundant and expanding production is one that is most fundamental in the program of the U.N. food and Agricultural Organization.

In respect to food, Canada is a fortunate country and we Canadians a privileged people. With all the abundance we have in this country it is difficult to appreciate the seriousness of food shortage in the world food picture; yet for millions in many countries (and for those nations) hunger is a stark reality. In 1949 world production of food overtook the prewar volume but with a net increase of 200 million people there is less per capita than before the war.

In underdeveloped countries FAO has clone a fine job of helping them to expand production.

For the agricultural exporting countries FAO's big problem is not so much one of inducing increased production as it is of seeing that methods of distribution and purchasing power on the part of food consumers can keep in step with or slightly in advance of desirable and continuous expansion in production.

For agricultural producers, such as ours in Canada the question is: dare we risk abundance? Instinctively our farmers would produce for plenty and they realize the world needs it badly but they remember all too vividly the tragic experiences of the past with unwanted surpluses, and have grave fears, that without due safeguards, expanding production may bring only a repetition of past disasters. Since producers see some surpluses already piling up and danger of more serious ones in the near future what should be done? Many countries, U.S., Canada, also European countries, are now seriously concerned about where they will find a market for their surpluses above domestic requirements.

Our Canadian Federation put a proposal for moving embarassing surpluses into consumption before the IFAP conference at Guelph and it was unanimously endorsed. It proposed the setting up of an international agency and fund to take surpluses, arrange for their sale to needy peoples at special prices, and have the loss shared between the fund and the supplying country.

Two days after our IFAP conference closed, our Secretary was in Paris putting our recommendations before the Food Council of FAO. They set up a committee of experts to consider these and similar proposals. The committee met in August and September and their report endorsed by the Director-General of FAO, recommends establishing an international agency (to be called the International Commodity Clearing House) and fund to move surpluses into consumption in a manner somewhat similar to that which we had proposed. In fact the FAO proposal goes even farther than ours, because the agency, ICCH, which they suggest is designed to be a double-barrelled affair--a clearing house both for surplus commodities and for inconvertible currencies. That proposal is now before the 58 member governments of FAO. It will likely be the main item on the agenda of the FAO General Conference which opens in Washington on the twenty-first of this month.

It suggests two procedures, one the sale of surplus commodities to needy countries at special prices as we had done, but with the fund assuming the loss involved, the second selling at normal market prices to be paid in soft currencies, with the Clearing House, holding that currency to the credit of the supplying country until such time as that currency becomes convertible.

Our IFAP had proposed a coordinating body for international commodity agreements. FAO recommends that the ICCH should be such coordinating agency.

The real danger is that if some such plan as this is not agreed upon, each country will approach the problem from a purely national point of view. That could result in a renewal of dumping, cut-throat competition and narrow nationalistic tariff policies. If there is no order by means of an international approach the result could be disastrous perhaps as bad or worse than that of the thirties.

If Canada supports the FAO plan, we will have to contribute our share of the fund agreed upon. There will be some opposition to that. But if we get into an other depression without any international plan to help take up the shock what will it cost us in subsidies, giving away surpluses at 100 per cent loss, curtailing and restricting production, exploiting our soil, dwindling purchasing power in agriculture, then in industry, then in unemployment, high costs for unemployment insurance, strained finances, bankruptcies, and not unlikely social unrest. In the aggregate what will such a situation cost all nations together? Perhaps far more than it would to support a plan such as FAO's. Some will say we can't afford to do it. I wonder if we can afford not to do it.

In any case I am convinced the next great step forward in human history will be that of the world feeding itself by means of an orderly, organized, international plan. I believe that's the real basis for both peace and plenty.