Mr. Diefenbaker:

I am sure the banks will make no advances against wheat lying on the ground, having regard to the probable toughness of that wheat next spring. I think in a case such as that there should be some provision whereby payments similar in nature to those under the Prairie Farm Assistance Act would be made available to farmers. I am sure of this, that if a farmer goes into the bank and says "I want to get an advance of up to $1,000 on 200 acres of wheat lying in swaths, and 100 acres that is standing unthreshed in the field," regardless of the 25 per cent guarantee on the part of the government that farmer will have made a fruitless visit to the bank, unless his credit is so high that the 25 per cent guarantee would not be necessary in any case. I am suggesting something in the nature of the payments under the Prairie Farm Assistance Act. Legislation analogous to that would cover the situation.

I am not going further into the question at this time. Generally speaking what has been done is a step in the right direction. However, I do not think it holds out much hope for the western farmer who finds himself in a predicament today, first of all because of government failure to realize in May, June and July the probability that our crop would be one of the greatest in all history. Having realized that, one would expect the government to have made provision for the removal of many millions of bushels of wheat glutting the elevators, making those elevators available to the farmer for his marketing.

The situation is serious. The minister has seen it at first hand. No one who has not seen it can realize what it is. I have spoken to one or two members from Ontario who in recent months have travelled to the west, and they tell me that if they had not seen what they did see they could not have realized just how serious the situation is. What is being done through the announcement of policy by the minister I am sure will cause no loss to the Canadian treasury. It could have been brought into effect-I say it should have been-weeks ago. No doubt there would have been earlier consideration, had the event that took place about one week ago been set a month earlier. A step is being made in the right direction. I believe in commending where commendation is due. In making this criticism, I couple with it commendation of the government for having made provision, even though it is too little, and much too late.

Mr. P. E. Wright (Melfort):

Mr. Speaker, in common with the hon. member for Lake Centre (Mr. Diefenbaker) who has just taken his seat, I agree that this is a step in the

right direction. As he has said, few people in eastern Canada realize the disappointment farmers in western Canada have faced in the last two years.

Last year we had one of the best crops we had ever grown, but we found in August that it had seriously deteriorated through frost. In fact the loss ran into millions of dollars. In the part of the country I represent many farmers did not realize anything from their crops. Large areas were completely frozen, and the crop had to be burned this spring.

This year our crop came through in most areas without serious damage from frost, though there were some isolated areas where the crops were frozen. But again we found we were unable to harvest this crop. In the northern part of the province, in the Carrot River valley, the northern part of the Meadow Lake country, and the Prince Albert country, we knew on November 15 there would be no more threshing. A large quantity of snow had fallen by that time, and it would have been most extraordinary indeed had we been able to thresh any of the crop that remained out. That was a large percentage of the crop. I believe I am speaking conservatively when I say that in that area only 40 per cent of the crop has been threshed, and 60 per cent is either lying in swaths under the snow or is still standing.

What will be realized from that, no one knows. Due to the fact that it was an extremely heavy crop, we do know that the chances of harvesting it in the spring will be that much less. The grain is lying on the ground so flat that, having regard to the state in which the snow will leave it in the spring, it is most doubtful whether it can be combined. As the minister has stated, it is true that the final payments by the wheat board for last year's crop will help a great deal in many areas, but there are many people who lost last year's crop and therefore have no payments coming from the wheat board.

In many areas in the northern parts of Saskatchewan and Alberta there are farmers on new land who have only from 20 to 100 acres under crop. The most they could receive from the payments on last year's wheat crop would be quite small.

I should like to say a word in commendation of the wheat board's method of handling grain. I think the wheat board did an excellent job in marketing the 1950 crop. I have heard it stated by many farmers in western Canada that if it had not been for the orderly marketing under the wheat board they would have received from 25 to 50 cents

less per bushel for their lower grades. I think we should commend the wheat board for the manner in which they marketed last year's crop.

These final payments are not going to take care of the small farmer in the northern part of the provinces, nor do I think this loan will take care of him. In many cases the small farmers are some distance from the towns, and they have not been in the habit of getting loans from the bank. They have never been in the position where they could go to the banks and obtain loans because of their small acreages. Under this guarantee they will be able to go to the bank manager for the first time, but my opinion is that their chances of getting anywhere near the maximum loan will be small indeed.

I am afraid that in many cases they will be unable to repay it. I think some provision should be made whereby a farmer who had a total crop loss would not be asked to repay this loan. In many cases up there the crops are going to be a total loss, and that will mean the loan will have to be carried over for another year. As I say, I think where the crop is a total loss some provision should be made that it will not be necessary to repay the loan from the 1952 crop.

I am not so much worried about the farmer who has three, four, five or six hundred acres under crop because in most cases he can take care of himself. He will have payments coming from last year's crop and will be able to carry through, perhaps with a small loan which he would be able to get under this legislation. But I am afraid that many of these smaller farmers are not going to benefit from this loan because, as I said, they have not been in the custom of dealing with banks. The bank managers do not know them and do not know whether their land is good or not. Naturally they will hesitate to make loans to those people. The minister did not state what the interest rate on the loan would be but I suppose-

Mr. Howe:

The commercial rate.

Mr. Wrighi:

Five or six per cent when it is borrowed from the bank. Again I do not think that is sufficient, especially in the ease of the small farmer whose crop was a total loss last year. The minister has indicated that he does not think the full amount guaranteed will be used. I think that will depend entirely upon the policy of the banks. If they are fairly liberal in making these loans, it is quite possible that the full amount will be used.

Mention has been made of small loans under the Veterans Land Act being similar to these, but I do not think they are. This

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is a different type of loan. Those other loans were not made to people who were suffering under the disabilities of the small farmers in the northern parts of the provinces. Not only should we have legislation on a more liberal basis; I think the government should have brought in legislation with regard to farm-stored grain. The hon. member for Lake Centre (Mr. Diefenbaker) mentioned that, and the hon. member for Assiniboia (Mr. Argue) brought in an amendment to the speech from the throne asking that there be an advance on farm-stored grain of up to 75 per cent of the initial payment. I believe if that type of legislation had been in effect we would have had a more orderly .marketing of our crop than we have at the present time.

It is true that for the last two years the wheat board have been anxious to get deliveries of grain to meet their commitments and the necessity for this type of legislation has not been so apparent. But if we had had good weather this fall and had been able to thresh our crops in a normal way, a large percentage of that crop would have had to remain on the farm or there would have been one of the worst gluts that has ever occurred as far as transportation is concerned. Everyone would have been trying to market his grain just as quickly as he could. Until we have some permanent arrangement for payments on farm-stored grain that condition will prevail in any normal year. I ask the minister to give serious consideration to devising some method of making payments on farm-stored grain.

With regard to this particular piece of legislation, as I said before we are glad to have it. It will help in some cases, but I do not think it is going to help a great many of the farmers with small acreages who have not been dealing with banks and who are not known to the bank managers. Those bank managers will hesitate to make loans to them. If there were some provision that in the case of a total crop loss the loan would be paid in full out of the $5 million guarantee, then I think the banks would be freer in making loans to the type of person whom I am sure both the minister and the Minister of Agriculture (Mr. Gardiner) would like to see helped under this legislation. I ask them to give serious consideration to making some arrangement with the banks whereby those people who have a total crop loss will not have to repay their loans.

Mr. Robert Fair (Battle River):

Like the

hon. member for Lake Centre (Mr. Diefenbaker) and the hon. member for Melfort (Mr. Wright) who have preceded me, I am glad the Minister of Trade and Commerce

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(Mr. Howe) has introduced this resolution tonight. I am only sorry it was not done five or six weeks ago. Had that been the case I believe many farmers would be enjoying a much happier Christmas than they will be able to do under present circumstances.

Many people do not realize that in large areas in the prairie provinces this is the second year in succession when crops have been lost during the winter months. The minister has stated that conditions are changing continually, but I do not think they are improving very much in many sections of the country. I understand that some threshing has been carried out during recent weeks in the southern part of Alberta, but they have the Chinooks down there which are frozen up by the time they get to the northern part of the provinces of Alberta, Saskatchewan and Manitoba. As far as I know very little threshing has been done in my part of the country, and I am not as far north as many other farmers. The final payment on the 1950 crop has helped to a considerable extent, but here again I think many hon. members do not realize that the farmers were in debt and have been waiting for some little time to pay off their debts with the 1950 final payment. Therefore that money will not last long. It is all promised to merchants and others. Perhaps it will have to be used for paying back taxes. Therefore nothing will be left to take care of 1951 crop expenses. Many people also do not realize that the farmer's crop is his pay cheque for the whole year. By some method he has to finance the putting in and taking off of his crop and so on, and until he receives payment for his grain he is not in a very happy position.

I realize that shipments of several million bushels have been made recently, but so far as the farmers are concerned in most cases they received payment on that grain some time ago. That will not help them to a very great extent. The minister also stated that many farmers are able to carry on because they have had good crops and good prices. I think the minister knows a little better than to try to tell us that the farmers have had good prices in the past. Perhaps they are good when compared with the depression years of the thirties, but if the minister or anybody else will consider the cost of the things the farmer has to buy in order to produce then it should not be hard to understand that grain prices are away below what they should be.

With respect to loans, I feel that the banks are the proper agency to make them. It has been suggested by some that the Canadian

wheat board should advance loans to farmers. If that proposition had been put forward I would have likely been the first to say we should not do business that way. The business of the wheat board is selling grain, not carrying into effect emergency policies of the government or other matters of that kind. Concerning the amount of the loan, $1,000 to each farmer, I am not quite sure whether that will be sufficient in some cases. In most cases I believe it will be, but I think the bank managers, who are experts in their fields, should be given some leeway in order that they might extend a little more credit to a farmer who had a good crop but has not been able to harvest any of it.

In the past bank managers have been doing a good job so far as guessing what the farmer will do is concerned because they do not only take his assets into consideration. They also consider his record of past performance. If he has been doing his job and repaying his loans in the past then I think the government might allow a little leeway over and above the $1,000. Where a farmer's crops are under snow at the present time, in addition to having the expenses of that crop he will have to have enough money to buy seed for the 1952 crop. If I were sowing seed again on the land I do not think I would take a chance on grain that had been under the snow all winter. That means the farmer has to have the cash to buy his seed somewhere else.

I am also glad the minister made it plain that this is an interim advance and not a gift to the farmer, because many people are ready to jump at any excuse to pin something on the farmer when it comes to receiving money from the Dominion of Canada. If the farmers were given full credit I think it would be established that they are the ones who have been making gifts to the rest of Canada rather than accepting them in the past. I believe figures can be produced to demonstrate that fact. The farmers are honest. I believe their record is as good as that of any other occupational group. A return brought down recently having to do with farmers' income tax showed that in the years 1945 to 1950 inclusive only two prosecutions took place for evasion of income tax and just one conviction was secured. That indicates they are honest.

Some farmers will be unfortunate enough to lose their crops. Before they can be harvested in the spring they may be flooded out or destroyed by mice or other animals. In that case I would suggest to the Minister of Agriculture (Mr. Gardiner) that P.F.A. or some such assistance be granted to them.

When the minister was in Calgary and Saskatoon recently he made two statements with which I cannot agree. One had to do with the recent $65 million gift to the farmers of the prairie provinces. The minister realizes quite well that if the farmers had been paid the class II price for their grain during the period covered by the $65 million they would have had another $367 million in addition to the $65 million. In the same period they also subsidized Canadian consumers by supplying wheat to the millers at a price below what they would have received for it as class II wheat, and another $137 million should be added for that.

I believe these things should be taken into consideration when dealing with the problems of the farmers. In Saskatoon the minister said he would refuse to change the domestic price. He may have also said that in Calgary, but I did not see that report. I think we should no longer ask the farmers to give one-third of the price of their wheat to the Canadian consumer. Absolutely no case can be put up to support such a policy. I hope the government will change it without delay, and give the farmers what they are entitled to for their grain. Everybody realizes that the cost of machinery, wages and everything else for which the farmer has to pay has increased by 200 to 300 per cent over the past years. If we had had the kind of policy we should have had most of our farmers would have had a little reserve set aside so that a crop failure in one year would not have put them in the circumstances in which they find themselves at the present time. I may have more to say on this matter when we get into committee.

Mr. J. A. Ross (Souris):

Mr. Speaker, first of all I should like to say that I think this is a step in the right direction, but like previous speakers I believe the provision is quite inadequate. Today I have been studying the report of the dominion bureau of statistics issued on December 13, 1951, dealing with the value of the wheat crop by provinces. Based on their figures the preliminary payment for wheat would indicate a value all told in the three prairie provinces of approximately $600 million. That is on the basis of the initial payment. As I understood the Minister of Trade and Commerce (Mr. Howe), he said that about half the crop was still out in Alberta, 25 per cent in Saskatchewan and a very little in Manitoba. On the basis of these figures founded on the initial price this would mean that the value of the crop still unharvested is approximately $175 million.

Therefore hon. members will readily see that the guarantee of $5 million is less than

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3 per cent of the value of the crop which farmers still have unharvested. It is very small. The minister said that prevailing commercial rates of interest would apply, and I presume that the rate of interest will be set out in the bill when we receive it. I would think it should be. I agree with previous speakers that there will be many small farmers, who really need assistance, who will find difficulty in obtaining a loan from the banks. The minister says he does not believe the $5 million will be taken up, and that might well be so. In my opinion many of the needy farmers will be unable to obtain assistance under this scheme. Officials of the minister's department and others claim that we are going to experience difficulty in transporting our grain because of our present method of harvesting. It is said that the situation in the last two years is not temporary, and that we shall have to revamp our whole system in taking care of future crops. If that be true, and I think it is, then the government should give serious thought to assisting the farmers in storing the grain on their own farms.

As I have pointed out in previous statements in this house, we have the experience of our neighbours to the south who receive loans on farm-stored grain. In fact the United States has already advised the farmers that the initial payment, based on 90 per cent of parity, will be $2.18; and this crop has not yet been seeded. For 1952 no quota is being placed on the acreage because the United States wants full production. The farmers are going to be guaranteed $2.18 a bushel on properly stored grain, plus monthly storage up until April. After that they can turn the crop over to the government or they can sell it at the prevailing market price and pay off the loan. The market price is very much higher than the guaranteed loan of $2.18 per bushel. As at present the federal treasury of the United States pays that difference to the farmers, and it is a very great difference. In fact the difference between what the United States farmer receives in North Portal as an initial price and what the Canadian farmer receives is $1.07 and a fraction per bushel. On December

4 the United States farmer would receive $2.30, on the street at North Portal for a certain grade of grain, while his Canadian neighbour would receive as an initial payment $1.23. That is a great difference.

Our good friends from Ontario receive considerably more than $2 per bushel for their wheat today because they do not sell through the wheat board. The market is higher than that. I feel that, because of the trend that has taken place in Canada over the past few

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years, our government should give consideration to the United States system. It is true, as some people would argue, that under this storage system one farmer will simply be paying another for storage through our pooling system. But that is the case today, as the cost of storage paid to the elevators is pooled through the wheat board in many cases.

I think this should be given serious consideration. I know the minister and those people who have been out west will realize that the situation is very much better in Manitoba than in Saskatchewan or Alberta. They will realize how serious it is for these people who have their grain out under the snow. Our sympathies are with them, because they are going to experience considerable hardship. They have their year's expenses to meet. This year the cost of production has been higher than for any year in the history of this country. While we shall have statistics issued showing the great national income of the farmers this year, it should be pointed out that their cost of production has been considerably higher than in any previous year. The cost of farm implements has increased in 1951 by 14 per cent over 1950. In fact there has been an increase of 81 per cent above the level of 1939. The price of fuel oil is increasing, and farm wages are much higher than ever before in the history of this country. All of these factors must be taken into consideration.

I just wanted to make these few remarks at this time. I shall have a few questions to ask when we have the bill before us, but I do request the minister and his officials to give serious study to the possibility of introducing more comprehensive legislation that will assist in the marketing of next year's crop. The departmental officials claim that because of our system of handling grain we are going to have greater difficulties than we have experienced in the past, so thought should be given to that problem.

Mr. H. R. Argue (Assiniboia):

Along with other hon. members I want to say that I welcome the announcement made by the Minister of Trade and Commerce (Mr. Howe), concerning the steps the government is prepared to take to deal with the emergency situation in western Canada. As is well known, the problem has two parts. The first is the difficulty of marketing the grain the farmers were able to thresh, and the second is the difficulty the farmers had in threshing their grain. In some parts of the country large acreages are still lying under the snow. The box car situation has indeed been very difficult. At some points in western Canada,

as the minister stated tonight, very little grain has been moved. I do want to say that I am pleased that the government appointed a controller. Any shortage of box cars at any particular point which has been brought to Mr. Milner's attention has been dealt with in an expeditious manner. I believe the fact that we have a controller is of material help to western farmers.

So far as I am concerned, I am not in agreement that this was the best method of handling this difficult situation. It seems to. me that when any farmer goes to a bank manager to ask for credit, the bank manager must of necessity apply a means test to the farmer's application. In other words if the farmer can show the bank manager that he is a good credit risk, that he has cattle at home on the farm or that he has some grain which he has not been able to sell, the bank manager will likely grant his loan. If he is a small farmer who has been unable to harvest any of his crop, he is the type of farmer the bank manager is most likely to refuse. I believe the best method of handling this situation, which is an emergency situation, would have been to make advances through the elevator companies at the local points, with the government paying the interest and guaranteeing the wheat board against possible loss.

Every farmer in western Canada has to market his grain on his delivery quota book. I believe that farmers are basically honest, and when they have to market their grain on their own delivery quota book the elevator companies would be in the best position to collect the advance. As a matter of fact, Mr. Speaker, I believe that the premier of Saskatchewan, and I would even go so far as to say the municipal officials, the representatives of the federation of agriculture, together with the leader of the Liberal party, Mr. Walter Tucker, believed the government was going to handle this situation by advances made through the wheat board facilities. I have here a press report which appeared in the Leader-Post of Thursday, December 6, of a statement made by the premier of Saskatchewan to the Saskatchewan legislature. The report is as follows:

Every likelihood exists that an advance will be paid farmers for unharvested unthreshed grain on their farms, Premier T. C. Douglas told the legislature Wednesday.

Under such a system, Mr. Douglas said, a record would be kept at the elevator and the payment checked off when the grain was delivered.

A payment of this nature would be different from a loan, he said. It would be treated as an advance and there would be no interest.

The premier said Trade Minister C. D. Howe was expected to make a statement either when he was in the west on a current trip or when he returned to the east.

If an announcement was not made cn advance payments at the elevator for undelivered grain, he continued, then a move would be made toward a second proposal.

The second proposal the premier outlined was the proposal for loans to farmers guaranteed by the municipalities, the provincial government and the federal government. But the premier of Saskatchewan, because of the discussions he had with the Minister of Agriculture when the minister made his trip to Saskatchewan, was able to say in the Regina legislature that he felt, following those discussions, that the most likely way it would be done was by advances through the wheat board; and the premier of Saskatchewan supported that kind of policy. The press report goes on:

Opposition leader Walter Tucker said he agreed the advance payment proposal seemed to be the better of the alternatives.

It seemed, he said, to be a "very rational solution or partial solution." Many people would be preferring this to going to the banks and municipalities.

Mr. Tucker said he had made representations to federal authorities to have storage paid farmers who store their own grain at least this year and perhaps as a permanent policy. He had suggested some system of advance.

He believed some thought should be given to payment for farm storage.

I think, in this situation, the Minister of Agriculture knew the best type of policy to deal with the matter. I believe, from the report I have just read to the house, that an advance through the wheat board was the basis on which the discussion was held in Regina. I know, from the statement, that was the premier's impression, and that such a policy had the support of the leader of the opposition. In the resolution the government proposes to guarantee the banks against loss up to an aggregate of $5 million, by guaranteeing 25 per cent of the aggregate loans up to $20 million.

In my opinion, if one read this resolution without knowing the situation in western Canada one might have thought it to be a measure of assistance to the banks in western Canada rather than one of assistance to the farmers. The farmers are not going to get anything for nothing. They are going to have to pay the full commercial rate of interest. The banks are going to get a good return on their loans; and if they have any loss, they are going to have that loss paid by the federal government.

I believe there was a method by which the government could have provided some additional payments to farmers who have undelivered or unharvested grain, that would

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not have cost the government of Canada a single dollar and still would have more than covered the interest rate that farmers will have to pay. I refey to the payment of farm storage. The elevator companies now receive farm storage from the Canadian wheat board. They are paid at the rate of one-thirtieth of a cent a bushel per day. The elevator companies are now paid .1 cent per bushel per month as a storage payment. That works out to 12 cents per bushel per year. If the average value of the grain on which they wei .. paid storage was $1.00 a bushel, that payment amounts to an interest rate of 24 per cent. If the value of the grain, shall we say, was $1.20 a bushel, then storage at the rate of 12 cents per bushel per year is equivalent to an interest rate of 20 per cent.

I think the farmer who is unable to deliver his grain or who is unable to harvest his grain is entitled to that storage payment. The wheat board made a storage payment some years ago; I believe it was about 1942, during the war, when there was a serious marketing difficulty. Administratively it was exceedingly simple for the wheat board to make that storage payment. All the wheat board had to do was periodically make a small advance in the initial payment for wheat, equivalent to the storage charge. If there had been in the initial price a gradual increase equivalent to the storage charge, the farmer who threshed his grain in the spring, and who had to go all fall and winter without a great deal of revenue, would have more revenue in the spring than he would have had in the fall, on the equivalent number of bushels, to an amount sufficient to cover any loans he might have had to make.

I am glad the government has had the wheat board send out the final payments on wheat, oats and barley. The fact that those final payments were made at an early date and that they were highly satisfactory, when one considers all the difficult circumstances under which the board had to operate, accounts in large measure, I think, for the favourable vote in Manitoba on the coarse, grains plebiscite.

I can remember that in the wheat board debate last year I moved an amendment asking the government to wind up the pools within sixty days of the end of the crop year. The minister at that time said the idea of having power to wind up the pool year in a short time was mainly to handle, as he called it, dribs and drabs that had not been sold; in other words, a few million bushels of grain. I am glad the minister has had wound up the oat, barley and wheat pools a short time after the end of the crop year. I think

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that is the way it should be handled. I hope that next year, the year after, and the following year the government will consider as a precedent the good job the minister has done in that respect this fall, and will continue to pay out whatever balance there is in the various pools at the end of the crop year, and to make those payments before the beginning of the next calendar year. In his statement tonight the minister said the total of these final payments amounted to some $130 million. He added to that, as far as farm income is concerned, the returns farmers received from having marketed in the present crop year, that is up until December 6, some 291 million bushels of grain. The farmers of western Canada have $130 million as the final payment from the various pools. They have the proceeds of 291 million bushels of grain. I would take it that from all these sources western farmers have received this fall something in the neighbourhood of $400 million.

Mr. Howe:

That is correct; yes.

Mr. Argue:

The minister says that is a correct statement. I now come to this, Mr. Speaker. The most the banks can lend under this measure is $20 million, which is just 5 per cent of the money the farmers have already received. It would seem to me that if half the crop in Alberta, or nearly half, is still unthreshed, if 20 or 25 per cent of the crop is still unharvested in Saskatchewan, loans amounting to 5 per cent of the total amount of money the farmers have already received will be insufficient to assist in an adequate way those farmers who have been unable to harvest and market their crops.

Most of the suggestions that were made in western Canada in the last two months as to an adequate advance on unthreshed grain amounted to a figure of $10 an acre. If that was a reasonable figure-and it seemed reasonable to me-the $1,000 limit means the farmer who is able to satisfy the bank manager that he is a good risk will be able to get an advance equal to $10 an acre on a hundred acres of crop. The basis on which the Prairie Farm Assistance Act is operated is more generous than that, in that payments are made on one-half the cultivated land up to 400 acres, or payments are made on up to 200 acres of crop. I believe the $1,000 loan the farmer can obtain under this provision is too little for the majority of those farmers who have been unable to harvest their crops. I do not make that statement because I want to criticize this measure. I do so because I do not think $1,000 goes very far on a farm. A thousand dollars does not go very far for anyone, even if their only expense is that of

living and providing for their families. The farmer has additional expenses. Most farmers have incurred obligations all through the summer to the local storekeeper and the local fuel dealer. Most farmers now have very large obligations to implement companies. When one considers that, along with these obligations, the farmer will have to provide for his own family's living expenses and other farm expenses, the $1,000 ceiling to my mind is too low. I think the ceiling should have been not less than $2,000.

Before I sit down, Mr. Speaker, I want to impress upon the minister my conviction, for what it is worth, that there should be provision for farm storage. It has been said over and over again that it would not cost the federal treasury a single dollar. If one farmer, because of bad weather conditions, because there is a shortage of box cars, cannot deliver his grain in the fall, I believe he should be entitled to a slightly higher initial payment next spring or early next summer when he does deliver his crop. The elevator companies are now given 1 cent per bushel per month as storage. It has been sufficient to encourage the elevator companies to build large annexes and other additional storage. Out of that 1 cent per bushel per month they have been able to finance the investment cost, cover depreciation and cover interest on the capital investment. If it is fair to pay farm storage to elevator companies it should be fair likewise to pay farm storage to farmers. If that provision were made, Mr. Speaker, then the commercial interest rate that the banks will charge for the loans made under this measure would not be a burden on the farmer. I also think the government should consider-and I hope they will-making a 75 per cent advance on farm-stored grain, not only as an emergency policy for this year but also as a good permanent piece of legislation.

In a word, Mr. Speaker, I welcome the legislation. I would prefer to have seen advances made through the elevator companies at no interest charge to the farmer. But to assist the farmer to pay the interest under the present measure I hope the government will make provision for the payment of farm storage which would be more than sufficient to cover the 5 or 6 per cent rate of interest payable to the banks.

Since I may not have an opportunity to say a few words when the bill is introduced I should like to take a few minutes now. I am neither a western farmer, a grain grower nor an eastern farmer, but I have listened to the appeals that have been made here since the session

began and my sympathies are certainly with the farmer in the condition in which he finds himself in western Canada. After all, we must look after the farmer. I view the occupation he is engaged in as a great work for the benefit of us all. The farmer is the greatest gambler of any man in business, in the professions or in anything else we have in our communities. He gambles from the time the seed is put in the ground. He gambles on whether he is going to get the proper soil productivity, and also on whether he is going to get good cultivation of the soil. He goes right on gambling to the time of harvesting. He gambles on weather conditions, and worst of all he has to gamble on marketing conditions. Well, it is not quite so bad gambling on the market conditions in the east as it is in the west, because in the east the farmer uses his own experience and smaller organizations in marketing his products. But in western Canada the government takes charge of the marketing conditions, and according to the report we had last year it lost a good deal of money. Someone repeated the statement tonight that the wheat growers, through marketing conditions set up by the government, lost about $300 or $400 million.

Mr. Howe:

I thought we settled all that in the Manitoba plebiscite.

Mr. Sinnoii:

That is nonsense.

Mr. Blackmore:

It is not nonsense.

Mr. McLure:

I am only saying what western members have said. I, for one, supported the $65 million they got from our treasury last year. I am not making any complaint about that. My sympathy goes out to them again on this occasion, and I am pleased that some guarantee is being given them so they can be ready for the crop season. And, instead of making it a short-term credit, why not make it for a longer term, so they will have a chance to get along until the crop is taken off?

I should like to add some personal observations, the first of which would be that while the farmer is a gambler, the fisherman is a real runner-up. I am proud to see the Minister of Fisheries (Mr. Mayhew) in his seat, after escaping from the communists in Korea. I know he will appreciate what I am going to say about the poor fishermen in my own locality. Last November there was a very heavy storm in that area, with winds reaching a velocity of 70 miles an hour, with extra high tides which broke up practically all the breakwaters, so that the waters flooded in over the beaches and around the homes of the fishermen. It invaded their fishing shanties and their equipment. A large percentage of that equipment was a

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total loss, so the fishermen are left without the security that would permit them to ask for a loan.

I bring this to the attention of the minister. When we are voting money for the western farmers I suggest something could be done for those fishermen. I know the machinery has already been set up in the Department of Fisheries, so it would take the burden of administration off the shoulders of the Minister of Trade and Commerce (Mr. Howe). This would cost only a few thousand dollars, as compared with the millions that would go to the west. Further, it could be operated through the fishermen's loans board which is already set up. I know the minister would find, upon investigation, that the loss suffered by these poor people has been very great. I know some of them whose homes have been disrupted. They had to leave their homes during the storm. Their shanties, buildings, machinery, equipment, boats, traps, rope and all other gear were lost. Some of it was beaten by the waves against the rocks. Surely those fishermen are deserving of some consideration at the hands of the government. If we are to be generous to the western farmers, then I want to see the fishermen of my constituency in Prince Edward Island receive what is properly their due.

Motion agreed to and the house went into committee, Mr. Dion in the chair.

Mr. Wright:

I should like to pursue the matter of interest rates on these loans. I must admit that it is some time since I have done any commercial borrowing from the banks. For a good many years I knew well what their rate of interest was on loans. The minister has said that it will be the commercial rate. Is that 6 per cent?

Mr. Howe:

Mr. Chairman, my hon. friend is now discussing the details of the bill. When it is before the house, all that will be set out. I do not think that at this stage I should discuss what is in the bill.

Mr. Wright:

I am only asking the commercial rate of interest at the moment. A principle is involved. The minister suggested that it was something the same as the loans under the small loans legislation for veterans. It will be recalled that in that instance we guaranteed the banks against certain losses; and because of those guarantees the banks made those loans at less than the commercial rate of interest.

In this instance we are guaranteeing a much higher loss than we guaranteed under the measure which dealt with the veterans. I think the same consideration should be given in this instance. If the banks are being

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guaranteed up to the total of $5 million, or 25 per cent of their loss, then I think there should be some consideration by way of a rate of interest lower than the commercial rate. It does not seem to me that the financial institutions of this country should be in the position of reaping a harvest out of every disaster in Canada. This was a disaster. In a large part of the western provinces the crop was not harvested this year. I certainly think the rate of interest should be lower than the commercial rate.

Mr. Queich:

Perhaps the minister would wish to wait until we reach the committee stage of the bill before he answers, but I would ask how loans will be averaged among the various banks. Will it be left to the banks to allocate the amounts among themselves, or will the government allot a certain amount to each bank?

I think the thousand-dollar average would be satisfactory in many instances, because it will carry the farmer who would not have any money at all. There will be many farmers who will borrow perhaps only a portion of the $1,000. On the other hand there will be a few who will require considerably more than that amount. I am thinking of those who are in the unhappy position of having their total crop under snow. If a farmer is farming 600 acres it would mean that in the spring he must purchase more than 700 bushels of seed wheat at a cost of perhaps $1,500. So the $1,000 would not begin to meet his cost of seed, let alone any other expenses. I should hope it would be possible to allow a certain amount of leeway to meet a situation of that kind.

Mr. Howe:

It is not the intention that these loans shall take over the financing of all western Canada. They are loans extended on rather sketchy security-that is, security of crops which may be in the fields, and may be subject to all sorts of damage in the winter time. The intention is to provide enough to look after the living expenses of the farmer. It is not intended that we will provide money to pay his debts, or-

Mr. Queich:

His seed is most important.