CE S

EADS

A Communist memo on the
Royal Commission Report

The ‘Royal. Commission > on
Price Spreads of* Food Pro-

ducts was -established.on De-
cember 10, 1957. This was dur-
ing the period of the minority
Tory government, when: Dief-
erfbaker was doing everything
possible to enhance his polit-
ical popularity. The’ Commis-
sion held hearings between
April and Noverhber 1958, and
then devoted: a year to the pre-
paration of its report.

The most important fe@ture
Of the Report is the criticism
developed of the food. chains,
their Profits. and method. of
operation.

It. leaves much to be desir-
ed asa study of the over-all
problem of food prices. Besides
the limitations on the think-
ing of the commissioners them-
selves, it must also be said
that the government gave the
Commission -very
terms of reference, which con-
fined them to the question of
spreads in prices as between
producer and consumer, and
restricting thereby their ex-
_amination of the whole range
of economic factors which bear

* upon the price of food.

The Commission itself had to
draw attention to this when it

- said. at the opening of its re-

port, “It soon became evident
that we could not ignore fac-

eee

pROFITEER

restricted.

tors lying outside the food mar-
keting, system.” It advances as
a fundamental explanation of
the disparity between prices
paid to farmers, and _ prices
paid by the consumers the fol-
lowing: That farm prices have
been held down as a result of
large supplies; that consumer
prices have risen as a result of
large consumer demand.

On the matter of farm prices,
the Commission makes the

point quite clearly that they

have been lagging. It estimates
that on the average the real

income of the farm. people
have been declining at the rate
of one percent per annum from
1949 to 1958. It attributes this
to improved agriculture pro-
duction as a result of improved
techniques, and difficulties in
the export market.

As regards its point with re-
spect to the pressure of rising.
consumer demand: the Com-
mission does not so clearly es-
tablish its case. While there has
been an increasing demand for
food because of increasing pop-
ulation, one would think that
this would be offset by increas-
ing productivity in agriculture.
The Commission does not es-
tablish that there has been a
big increasing per capita de-
mand for food by . Canadian
consumers which could have

bs

had in itself the effect of driv-
ing up food. prices.

The Commission itself infers
that a big part of the cause of
rising food prices does come
from outside the food market-
ing system, but it undertakes

no real examination of the

problem of inflation which has
become chronic in our econ-
omy. It does not bring out the
fact that the high price of food
is in reality a form of further
indirect exploitation of the
working class by the mon-
opolies. It certainly does not
suggest that the subordination
of the Canadian economy to
the arms drive has been the
major factor in the growth of
inflation,

It should be pointed out,
however, that neither does the
Commission “make any effort

to attribute “increasing price’

spreads to wages paid labor in
the food marketing industry.
It makes the point that these
wages have advanced less than
elsewhere: “Throughout the
period, wages in the foods and
beverage industries have re-
mained significantly below
wage rates in all manufactur-
ing industries.”

Without drawing the conclu-
sions which we must draw, the
Commission’s report does pro-

vide material useful in proving
the basic point that food prices
keep going up, despite the fact
that less and less labor is re-
quired for the production and
processing of food:

In examining the question of
profits, the Commission found
it necessary to ‘single out two
branches of food marketing in
which profits were excessively
high — prepared _breakfasi
foods, and food chains.

Throughout the report a
substantial criticism is direct-
ed at the food chains: ‘The
chains: are not low-cost, low-
rice firms. Profits of the chain
food stores were substantially
higher than profits-for retail-
ing generally (profits of food
stores averaged not less than
15 percent in any year).”

While attributing a good
part of increasing spreads to

: increased cost of packaging

and transportation, ete. the
Commission draws repeated at-
tention to the fact that the
chain stores, while providing
additional services, do not re-
duce profits: ‘“‘We are obliged
to.express our concern about
the tendency, which we believe

| to be evident and operative in

the period we have studied,

| for the firms in the food indus-

tries to be more active in offer-
ing consumers added services
than, lower prices. We are sat-
isfied that this condition is

‘| one of -the causes of the in-

crease in price spreads.”

The Commission develops

, the point that these practic
'do not leave the consum
| with a “choice” as betwee
' additional services and low§
| prices. Particular condemn
i tion is directed at such pre
‘tices as trading stamps,
other similar gimmicks.

In its general recommend
tions, the Commission was 0
viously hard put to advan
i any solution. It was no dou!
| under considerable pressure |
recommend governmental a
tions to “hold the line” in th
ways advocated by John Die
enbaker. However, it found
self ‘fully conscious of the d
ficulties and complexities
and confined itself to a ge
eral recommendation tha
“The government of Canad
maintain a firm position in qj
dense of a stable level of do
estic prices, and that the pe
ple of Canada lend their su
port to all policies appropria
to this end.”

* In discussing how. thi
might be done, the Com
sion only suggested “that tH
primary need is for the wid
dissemination of informatid
and competent and detache
comment on what is happenin
in the economy at any time.
We recommend the establis
ment of a permanent Counce
on Prices; Productivity an
Incomes which would preser
a yearly report to the Govel
nor in Council.” ;

t Continued on Page 7_
See PRICE SPREADS

January 22, 1960—PACIFIC TRIBUNE—Page