Ontario's Place in World Agriculture

MR. STALDER:

Distinguished members and guests, ladies and gentlemen: Mr. Minister, when I tried to analyze your department, I came to the conclusion that it can be both heaven and hell. Then I found definitions for heaven and hell, and here they are:

In heaven, you have a British policeman, a French cook, a German mechanic, an Italian lover, and a Swiss administrator; and in hell, you have the same people--filling each other's functions: thus, you have a German policeman, an English cook, a French mechanic, an Italian administrator, and a Swiss lover.

However, our guest of honour and I are both lucky today--he because he is being introduced by me and not by his critic, Orland French, of The Globe and Mail; and I because I am introducing Dennis Timbrell, rather than Eugene Whelan.

This being said, we are in the midst of controversy. Canagrex has claimed to have solved the jobless situation in the Canadian agriculture sector by stipulating that five men are now needed to milk one cow. One pragmatic farm hand wrote to Ottawa diligently hinting that any normal cow has only four teats. He got an answer stating that he had missed the entire point. One man is still needed to milk but also one man per leg to lift the cow and put her down again. Today, we are in the ninth inning of the 1982-83 year of The Empire Club and, again, we are in politics. For me, it is getting harder and harder to find good quotes. However, last weekend I read Aristotle once again and I found this quotation, "Morality and statesmanship must concentrate on pleasures and pains." Our guest of honour is minister for the fourth time. He has not given us any particular pains but we have also not yet had the ultimate pleasure--to see him as premier. Ladies and gentlemen, please welcome our guest of honour, the Honourable Dennis R. Timbrell.

MR. TIMBRELL:

Mr. Chairman, ladies and gentlemen: Mr. Stalder in his introduction hinted at my past experience in the Ministries of Health and Energy. My appointment to the Min istry of Agriculture and Food last year surprised a few journalists ... and that alone may have made the exercise worth while. But I know the question has occurred to many of you--"Why would a fellow from Don Mills want to take on the agriculture ministry?"

Well, the fact is, I asked the premier to consider me for the job because I feel some excitement about the problems of agriculture today and I felt that these problems would benefit from a fresh approach. Agriculture excites me because it isn't an old-fashioned industry. It has gone through some remarkable changes in the past fifty years and I think it is facing its most critical test right now.

When my grandfather was farming in Frontenac County in eastern Ontario, there were over 185,000 farms in Ontario. Today, there are only about 83,000. At the turn of the century, one farmer could produce enough food to feed himself and twelve other people. Today, he feeds himself and ninety other people. The fact that he is able to do this is, of course, due to the sweeping advances made in research and technology over the past one hundred years. The first major change of the century was the pre-World War ii mechanization that pushed so many people off the farm and into the cities. Then came the huge productivity gains created by fertilizers, pesticides, tile drainage, science-based husbandry, and sophisticated food-processing. These changes have led to the fact that in 1981, there were over a million acres more land in this province under cultivation than a decade before. The next wave is coming from biotechnology and computerized management systems.

Our farmers today are a well-educated group of risk-takers who have learned to take their place in the international market. They go to university, and they go in greater and greater numbers to the agricultural colleges run through my ministry. They study finance, genetics, and engineering. Every graduate of our colleges has experience with computers. And when they take over their farms, the capital investment they work with puts them in the same league as a respectable-sized factory. Some of the farmers I've met during the past fourteen or fifteen months don't even own a pitchfork. They stand at a control panel that looks like something out of the Pickering generating station and quote daily cash prices for beef in Omaha.

I think it's time we stopped treating agriculture as if it were some kind of a dull and distant cousin. It isn't a regional problem, or a cultural concern--it's an integral part of the industrial framework of this province and this country. We can't overlook it simply because it's been around for a long time.

Agriculture in Ontario is a Canadian success story. Ontario now handles over 40 per cent of all the food processed in Canada, with factory shipments in food and beverages totalling approximately $11 billion a year. Ontario honey can be found at Fauchon's in Paris. We are now a major supplier of pork to Japan, where the quality requirements are very demanding. The outstanding quality of our dairy breeding stock is widely recognized around the world. Last weekend, one hundred Holstein and Jersey heifers were loaded onto a plane bound for King Faisal University in Saudi Arabia. Last November, we achieved a breakthrough in the export of grain corn, when a boatload worth $8.5 million was sent to Spain. In fact, we have missions going all over the world searching out and capitalizing on any market anywhere for agricultural products of this province.

There is no better analogy to give us confidence in the Canadian economy than the entrepreneurial instinct that animates our farm sector today. Agriculture, just like our finance and manufacturing industries, is very much a part of the changes taking place in the economy. It is being run by talented individuals who are proud of the contribution they are making to this province as dollar-earners and job-creators. And as in every other industry, farmers have taken a beating during the past two years of recession. They can see as well as you can that fundamental and permanent changes are occurring in the market place. We are not simply emerging from another downturn of the business cycle.

Traditional industries in our economy are being threatened by more than just a lack of capital, or excessive government regulation, or deficits, or powerful unions. The problem goes deeper, into the very structure of the economy itself. Robert Reich, the Harvard professor and author of The Next American Frontier, makes the point that Western industrial nations have built their economies on the principle of high-volume, scientifically managed industry generating huge economies of scale and raising standards of living to unprecedented heights. Now, these traditional industries are losing their competitive edge to lessdeveloped countries who can take the same technology and use cheaper labour and raw materials to produce the same products for a fraction of the cost. Reich warns that unless industry undertakes some basic changes in its organization of production, unemployment will remain high and the American standard of living will continue to decline.

High technology and the development of a capability as an exporter of high tech is one highly touted response to the problem. Of course, the survival of all our industries demands that we employ the most up-to-date world-quality production tools and processes. That is the heart of our government's Technology Centres' Program through the board of industrial leadership and development.

But beyond that, responding creatively to the new rules of the game will mean that each nation must take a careful, honest, and hard look at what it is good at, and decide what strengths exist in its traditional industries and its resource base as well as in its new industries. If you have a comparative disadvantage in making anything, high tech won't solve the problem.

Japan is one of the fast learners in the classroom. In the past ten years, Japan has actually reduced its domestic steel-making capacity and has, instead, become a major exporter of steelmaking technology, engineering services, and equipment. Canada, however, also has many advantages in its existing industrial framework. Furthermore, we have the success stories to prove it. We also have a highly sophisticated and smart labour force. One of the satisfactions of having invested billions on education in the past twenty-five years is the remarkable pool of human talent we have created in the process. As well, our health-care system and our electrical grid are recognized leaders internationally and are backed up by technical and professional resources that are the envy of the world. We're very good at these things ... and we're good at agriculture too.

Nature has provided us with a clear, competitive advantage. Simple geography dictates that Canada, the United States, Australia, and Argentina are among the top food-producing countries in the world. While strides will be made in agriculture and other technologies by the Japanese or the West Germans or any of our world competitors, unless we lose sight of who we are and what we're good at, we will remain leaders in food production.

So let's work with the reality that agriculture will play a large role in our strategy for dealing with this growing burden of change. And as we build our strategy, we will have to avoid a general retreat to the solutions of the past.

The simple response to Reich's problem would be high tariffs and a return to protectionism. Of course, as your government we could not shirk our responsibility to stand up for the competitive future of, for example, Ontario's automotive industry. Our support for voluntary, temporary quotas on Japanese auto imports may have offended free-trade purists, but it is not responsible government to play dice with so many people's futures. That being said, the consensus across the country among our eleven senior governments is clearly toward freer trade and this is a long-term course to which we remain committed. This then leaves productivity, trade, export, and industrial change as our only realistic means for achieving recovery.

The president referred to a proposal by the federal government to deal with the problems of agricultural trade--Canagrex. Canagrex, it is proposed, will bring under one roof all of the federal government departments involved in agricultural trade to achieve a better co-ordinated national effort on the international scene and I applaud that. I take issue, however, when the federal government proposes to give Canagrex the power to buy and sell. The establishment of another federal Crown corporation with the power to intervene and manipulate the private sector is something I do not and will not support.

Not long ago, I was listening to an economist talk about the "permanent benefits of recession" as though the episode we are going through has somehow been good for us, strengthened us, and made us better citizens. But while I believe it has been important for Canadians to adopt realistic expectations and for business to become as efficient as possible, I don't think there is anything particularly virtuous about unemployment or personal bankruptcy. In fact, I get really irritated when I hear that sort of thing. When a theoretician talks confidently about the therapeutic effects of recession, it strikes me as the kind of confidence that is supported by tenure and an income well to the right of the national average.

The monetarists may have held us back from the brink of hyperinflation but the costs of that battle have been overwhelming. The problem with traditional economics as practised by the central banks is, as we all know, that it doesn't nab the people who abuse the market, just the ones who work in it. It keeps the honest honest. And many of those honest people are getting fed up.

It weighs on me when I see more than one and a half million people in this country out of work, half of them in their forties and fifties, trained for work in companies that can't be resuscitated ... and the other half are recent graduates. I can't accept that just because you're on the tail end of the baby boom you haven't got a right to a job. I'm shocked by the complacency in this country that says we're stuck with 10 per cent unemployment for the rest of the decade. While I acknowledge that Mr. Lalonde's budget this week contained some positive measures and a better sense of direction than we've had up to now, I am disturbed by his acceptance of continuing high unemployment.

One thing is clear though, and that is that there isn't a violent debate going on about the size of government. We are proud that Ontario's government is the lowest-spending government and the only government that I know of that has, in fact, cut its civil service. The issue isn't whether we are over-regulated or whether the deficit is too high. These points have been settled. The Conservatives in the population have, after all, won a few arguments in the past ten years. The issue is productivity and how to manage the system in changing times.

The question I am addressing is what we have learned over the past few years and how we can avoid stepping into the traps a second time. There has been a level of divisiveness in the public arena in the past that has eaten up a lot of valuable time, so it really isn't surprising that economic policy has been treated so erratically. We spent a good part of the last half of the seventies in a fight about our political unity. We cannot spend another decade on a debate that produces so little result. We have seen that confrontation politics leads to inattentiveness to our economic options and can send us down a series of economic dead ends. We can't wait until over one and a half million people are unemployed before we start looking for solutions.

I think the new budget offers a sign that the federal government is learning from its past mistakes. Let us hope that Mr. Lalonde is making not only an investment in the economy, but also an investment in a more mature and thoughtful discussion of our problems. If this budget represents a step away from the cyclical swings in ideology which have been the hallmark of political economy in Canada for the past fifteen years, then it is certainly a welcome sign. It's not that there haven't been any good ideas in Ottawa in that time. It's just that we haven't stuck to one long enough for us to produce any solid results.

But I see evidence that we are learning from our mistakes and I suppose that's what makes me an optimist. I see a growing instinct for co-operation in interprovincial negotiations. Working with the provincial ministers and major commodity groups on the farm-income stabilization program, we were able to achieve a quick and gratifying consensus which shows that working together is possible, when we want to do so.

And I see a new understanding of the size of the task ahead of us. The World Health Organization tells us that eight hundred million people live in a state of semi-starvation today. By the year 2000, two billion new people will be with us, mostly in the Third World. For their sake, we have a moral obligation to ensure that our agricultural sector is the most efficient in the world.

During the past ten years, food production per capita actually fell in fifty-one developing countries. The Food and Agriculture Organization of the United Nations predicts that, in Africa, demand will continue to grow faster than production until the end of the century. It will be up to us to fill this growing gap. Food exports from developed countries will have to double over the next twenty years. We have the capacity to meet that challenge.

More than this, we will have to expand our research base. We are very good at fine-tuning our crops for marginal soils and unfavourable climates. We have a lot of expertise to contribute to the problems in developing countries and I'd like to see us exporting some of it. After all, if the Japanese can do it in steel-making, why can't we do it in agriculture?

I believe that Ontario, as representing Canada's most significant and diversified economy, will be called upon once again to assume a leadership role in shaping this country's future. The measure of our success will be our ability to maintain the momentum that is building now in support of the politics of common purpose and understanding. Agriculture is a perpetually renewable resource, which will be an even stronger force in our future.

The appreciation of the audience was expressed by Colonel Robert H. Hilborn, a Past President of The Empire Club of Canada.