Mr. W. H. Jorgenson (Parliamentary Secretary to the Minister of Agriculture):
I wish to inform the house of a decision by the Canadian wheat board, pursuant to section 16 of the act, to exempt producers from delivery quotas on deliveries of grain to specified feed mills. I should outline briefly the background of this decision.
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Exemption from Grain Delivery Quotas
When the Canadian Wheat Board Act was amended in 1950, feed mills were brought under its jurisdiction. They were thereby placed in the same category as country elevators and became subject to delivery quota regulations. As long as producers could deliver all their grain within a crop year, the enforcement of delivery quotas was not difficult. Since 1953 the quantity of grain on farms has been in excess of the available elevator space, and the enforcement of delivery quotas in the case of feed mills became more difficult.
In 1957 a Manitoba feed mill appealed a conviction for violating board delivery quota regulations. A similar case arose in Alberta in 1958. In both cases the appeal courts, in 1959, upheld the power of the board to regulate deliveries to feed mills. While the board's authority was sustained, there was a period of slightly over two years, from 1957 until late 1959, when the board was unable to enforce delivery quotas to feed mills because its powers to do so were before the courts.
In the meantime the matter was considered by the standing committee on agriculture and colonization. In July, 1959 that committee recommended that the position of feed mills in the grain trade should be clarified.
The committee again took up the matter in 1960. In its report of June 27, 1960, it found that too much inflexibility in the allocation of quotas to feed mills is not in the best interests of either the producer or the consumer of grains for feed. It recommended that the apparent discrimination between agreement and non-agreement mills be studied to maintain a fair position between them.
Early in the present crop year the board gave careful consideration to its position. The feed mills, in their representations and in their statements to the standing committee, had emphasized that they are engaged in a local business, that their operations are continuous and that their intake of grain should not be based upon space available from time to time in country elevators.
For its part, the wheat board appreciated that it is primarily engaged in the marketing of wheat, oats and barley moving in interprovincial and export trade, and that some relaxation in respect of controls applicable to the local trade of feed mills would not necessarily affect its over-all operations. In its examination of the matter the board gave consideration to the fact that probably less than 10 million bushels of grain were purchased by feed mills as compared with over 500 million bushels marketed by producers through country elevators.
In October the board met with representatives of the feed mills. The outcome was a
proposal which would exempt feed mills from delivery quotas if they in turn accepted certain undertakings. In these discussions, representatives of the feed mills expressed the desire that their problems should be met within the terms of the Canadian Wheat Board Act, and they indicated that they would be prepared to accept an annual contract with the board which would be applicable to all classes of feed mills.
It is on this basis that the wheat board has acted. The announced policy applies only to those feed mills which sign the necessary contract with the board. Feed mills signing the new board contract agree to purchase grain from permit holders within the province in which their feed mill is located and to use such grain for resale as "prepared" or "processed" feeds within the said province. Exceptions will have to be made in a few cases where feed mills are located close to provincial boundaries. Feed mills signing a contract with the board will purchase grain from permit holders on a non-quota basis at prices negotiated with producers.
This in brief, Mr. Speaker, is the policy which the wheat board has decided upon.
Subtopic: PROCEDURE FOR INITIATION OF EXTERNAL AFFAIRS DEBATE