Machinery monopolies gouge farmers

On October 13 int Regina, Wil-
liam Beeching, on behalf of the
Communist Party of Canada pre-
sented a brief to the Royal Com-
mission on Farm Machinery.
Highlights of the brief are pre-
sented here.

T IS not accidental that it be-
came necessary to set up a
Royal Commission on Farm

Machinery and repair parts,
along with related questions.

The problem of high farm

machinery costs and prices has
come into sharp focus during a

_. As a result of the mecha-
nization of the: means of
preduction of agriculture,
‘larger capital investments
atid operational - expenses
are required. Hence; prob-
lems of credit, interest and
financing have increased to
a scale never before known.

‘Between 1961 and 1965,
average debt per farm just
about doubled.

in 1961, the capital value
of all farms was 39.1 percent
higher than in 1951, at 13.2
billion dollars. The average
capital invested per farm in
1935 amounted to little bet-
ter than $6,000. By 1961 it

was $27,389.

period of change and unrest.
Farmers are protesting, and
their protests have implications
which go beyond the terms of
reference of this Royal Com-
mission. _

The scientific and technical
revolution is bringing about
structural shifts in the economy.
It has already essentially affec-
ted and continues to affect the
main spheres of production, in-
dustry, agriculture and trans-
port.

Because of the technological
transformation that has taken
place in agricultural production,
the introduction of industrial
methods of production, as well
as the penetration of agriculture
by the big monopolies, farmers
are increasingly the victims of
profiteering and price gouging. It
is paradoxical that agriculture
serves the most basic needs of
man, but at the same time is
constantly. beset by crises.

By far the largest number of
our farmers face the proposition
that they must leave farming
forever, or face a dismal and
continuing future of poverty or
low-level living. This, we think,
is one of the basic reasons for
the mass participation of far-
mers in the preparation of farm
union briefs to this Commission.

It is our opinion that a pro-
gressive alternative does exist
for the farmers, and that the
work of this Royal Commission
should provide some basic an-
swers..

The briefs submitted by the
farm unions indicate that far-
mers are beset by many ex-
tremely difficult problems of
which the cost-price squeeze
emerges as the most pressing.

All monopoly concerns con-
tend that the reason for high
prices is that wages are too
high. They call it “cost infla-
tion” and include high taxes,
particularly those going to pay
for social welfare. They claim
their profits are too low, and
that the rate of profit is con-

stantly dropping. They direly
warn the workers that their de-
mands are unreasonable and are
the prime cause of rising prices.

No less so do the farm imple-
ments manufacturers make this
charge.

We say these assertions are
contrary to the facts. Profiteer-
ing is the root cause of high
prices. “Profits are the Sacred
Cow of our society. In present-
day society if one chal'enges the
sacredness of profits, or even
suggests that profits are too
high, the concerted power of the
press, the highly-paid “experts,”
and government spokesmen
thunder in defense of profits. But
if workers and farmers ask for
more, like poor Oliver Twist,
they are accused of acting
against “the public interest.”

Many farmers view them-
selves as independent operators,
able to make their own deci-
sions. Nothing could really be
further from the truth. The in-
dividual farm enterprise really
has little or no final say as to
the price he receives, or the
price he pays.

No farmer or worker can say
this is the price I’m going to get
for my product or for my labor.
They are compelled to struggle

The technological revolu- |
tion hasn't brought security
to the Canadian farmer.
Monopoly exerts its
squeeze through its control
of transportation, credit, the
processing industry, the
farm implements industry
and the market place where
it purchases the goods the
farmer must sell.

it is impossible for the
small farmers to continue in |

| the same old way. oe

for a price through a sometimes
long and painful process, of
which the strike,-in some form
or another, is often a final and
vital part.

The effort, unfortunately with
some success, has been to turn
workers and farmers against
each other as a means of divert-
ing both attention and pressure
from the big monopolies. The
same forces in society that want
to keep wages low charge high
prices over the counter, buy
farm produce as cheaply as they
can, and charge as much as “the
traffic will bear’ for all they sell,
including farm machinery.

Labor, as a factor in produc-
tion, has been declining, both in
the production of food on the
farms, in the food processing in-
dustries, and as a factor in the
manufacturing industry, includ-
ing the farm implements manu-
facturing industry.

Another big factor entering
consideration of the farm imple-
ments industry, is Canada’s
satellite relationship to the
United States. This has both a

bearing on price, and on the de-
velopment of an _all-Canadian
farm implements manufacturing
industry.

Closely connécted is the whole
question of developing western
Canadian manufacturing capa-
city, a splendid topic for Can-
ada’s 100th birthday.

With a total investment of
over $20 billion, a handful of
U.S. monopolies control well
over half of Canadian manufac-
turing, mining, petroleum, rub-
ber, auto and aircraft.

The substantial consumption
of farm machinery in Canada
should provide the challenge and
possibility of developing the
farm implements manufacturing
industry in our own country. But
Canada has been losing ground
to the United States.

Mr. Walter Gordon recently,

'in speaking about the problems

of free trade, pointed to what
had happened to the agricultu-
ral implements industry since
1949. He said that, with one ex-
ception (the new Massey-Fer-
guson plant at Brantford) all ex-
pansion has taken place in the
U.S.A. Cockshutt at Brantford
closed down and Massey-Fur-
guson offices moved to the
U.S:A. Mr. Gordon states that
most expansion will be in the

USA;

We believe the best -possible
solution to the entire problem
of the farm machinery manufac-
turing business in Canada is to
bring it under public ownership.
We believe the entire industry
should be nationalized.

A publicly-owned farm imple-
ments manufacturing industry
can be developed in an integrat-
ed plan which takes into account
the needs of the farm industry

- and Canada as a whole. In

other words, it can be integrated
with a planned development of
agriculture, combined with the
planned export of Canadian
know-how to the underdeveloped
countries of Latin America, Asia
and Africa.

The fact is that the monopo-
lies take those decisions which
give them, even though tempo-
rarily, the greatest immediate
return on their capital invest-
ment, regardless of whether or
not they answer the needs of the
Canadian people. This is even
more so with foreign-owned
monopoly.

There is also a need, in our

The value of raw food sold
by Canadian farmers rose in
1964 to $2 billion from $1.2
billion in 1949—a rise of
about 40 percent. But in that
same period, the retail value
of food sold in Canada rose
to. $5 billion from $2.1 bil-
lion—a rise of about 140

°F, <= wots a

. percent.

opinion, for the establishment
of a _publicly-owned all-Can-
adian farm implements manu-
facturing industry on the prai-
ries. Obviously the big monopo-
lies do not plan to do this.

It fits into the need to deve-
lop manufacturing and industry
in the relatively backward areas

i|
Communist Party propos «|
following immediate Bos fal

e Freeze prices of @ 7
machinery. Allow MO ay
price increases until ye jf
chinery companies presen it
cases for such increases gt
a board on which farm % 5
izations are definitely “ 7

of our nation., sented.
SEVEN FARM MACHINERY COMPANIES |
(net income or profit) patio of i
net proft
to sales |
in 1965

. 1964
Allis-Chalmers

1965 1966 |
3.1% {

Mfg. Co. $ 12,739,471 $22,109,576 $26,154,592 Fay,
J. I. Case Co. 13,158,557 10,741,440 17,312,214?
Caterpillar \ | y

Tractor Co. 123,833,745. 158,531,856 150,100,007 7g, jh
Deere & Co. 59,445,407 55,792,619 78,708,570 “|i
International anh |e

Harvester Co. 98,683,000 100,575,000 109,674,696 ~~ Iih
Massey- ey)

Ferguson Ltd. 45,015,985 40,067,011 45,238,560 "|
White {no) ih

Motor Corp. 18,056,152 22,399,583 32,089,483 1 i,

sag dom |
The cumulative total sales of e An attempt to bring int

farm implements and_ repair
parts in Canada between 1960
and 1966 was $2,399.6 million.
Some 63 percent, or a total of
$1,479.4 million were sales in
the. 3 prairie provinces. This
alone, indicates the promise for
such an industry in Canada’s
West. _

More, if the Canadian govern-
ment could be persuaded to de-
velop mutually beneficial trade
with the more backward na-
tions, the market potential for
agricultural implements is stag-
gering.

stigation af

prices by an inve iat
a .
mu ime

the sources of accu
expansion of the arr bi,
ments industry, and ©
monopolies. en of #84

e Standardization ° 3s
farm. implements Pa” ‘
sible. raw, oh
e Punishment, DY ie

charges, especial
: co
prices. Legal anuf

farm machinery m
companies to live UP list
warrantees. The est@

a
of law processes t0 ™

. ent hy
Year Wages production Valueadded per Value of shift \h
worker, annual production worker of own ms 1}
1961 4,439 8,739 980 \
1962 4,983 9,244 2,
1963 4,895 9,697 oe; CUR
1964 5,150 11,402 24 7 \
;
Wages increased by 16 percent in this period. Value added Palue dl ik
duction worker increased by 31 percent m this period, 4 a Th
shipments of goods of own manufacture increased 26 percell ) ih
(Catalogue 42-202, Agricultural implements industys 1%
pie :
ae
It could be done in two ways possible, -the costs we oy
with room for both to exist should be charged as re 1 :
side-by-side. It could be done by. panies whenever the ; i
making government loan capi- guilty. fed off

tal, and by doing whatever else
is necessary, to the existing
C.C.I.L. industry. It could be
through straight loan capital, or
it could be through joint co-op
government ownership.

e Establishment “weal
provincial-municip2” | ou

testing systems, WA" cer!
also responsible _f0! pou
farm machinery. 1!
combined with the

—_—-- eee

,

Cost breakdown of agricultural implements industries its?
, f
) Material & rene i
Year Wages Salaries Supplies 6%
1946 32% 8% 54%, 10°
1955 27%, 10%, 53% 41%
1961 229, 13%, 54% is
(Dominion Bureau of Statistics) a
ri
and P
It could be done directly a bureau of standards iy Mig
through a crown corporation set The introduction © 2 don.
up jointly by the three prairie should then only dat! wy
7 ta {074 oh
provinces, financed through such governmen models if
their provincial development _ pervision. No new arkel ey

funds along with funds from the
Canada Development  Corpora-
tion.

In any case where this is done
by private business, through gov-
ernment loans, it is our conten-
tion that the government loan-
ing the money should retain 51
percent interest in such a ven-
ture, so as to accrue 51 percent
of profits.

Pending complete nationaliza-
tion of the farm machinery
manufacturing industry, the

Chia Get Wrulee cig 3 ROY

year

allowed on the 4 pas?
‘properly tested 27° icy. ;
this government #8
a new price is S&  accé
dels, all costs t0
by the governmen ed:
a new price is 4 t
en A
aet

e The establish

i S. }
ernment agencle> op
to help organize sce 1 sath
Government assist@ i
the scope of snju tio
syndicates in ra pote ‘a
machinery servi@(ow

win te