It’s Still a Gamble

FLOYD S. CHALMERS May 1 1935

It’s Still a Gamble

FLOYD S. CHALMERS May 1 1935

It’s Still a Gamble

FLOYD S. CHALMERS

ONE WELCOMES Mr. McFarland’s statement. Light is needed on our national wheat policy. Mr. McFarland selects certain statements from my article and replies to them. He also takes a great many things which I did not say and replies to them at the same time. But he leaves many of my most important statements quite untouched. The net result, in my opinion, is to leave the main argument of my article unanswered. That main argument was that Canada, in its wheat pool and quasi-Govemmental wheat operations, has piled up an excessively large surplus of wheat; that in doing so it has maintained a market price for wheat that is out of line with the price at which our chief competitors are offering comparable grades; that in doing so we have leaned much too heavily on provincial and Dominion credit; that buyers in our best market, Britain, have responded by buying a smaller proportion of Canadian wheat and a larger proportion of competitive wheats; that the net result is that we have gambled with our markets.

Mr. McFarland and I agree on many of the elements in the problem; our disagreement is not serious on some others. In fact.

I am not certain that my original article did not say whatever is to be said for our Governmental wheat policy better than his reply says it.

Now for a few points raised by Mr. McFarland. I deal only with those that directly challenge my article in fact or opinion.

It is true that the concept of a world price of wheat is less valid than it was in pre-war days. But this is due to many governmental interventions of the type that Mr. McFarland is managing. But there is always a price at which our wheat will move into consumption, and it can no more be dictated by Mr. McFarland than by the “sharpbargaining overseas millers and merchants.” The “strictly limited world market for wheat” last year absorbed 553 million bushels of “net exports” of wheat, of which Canada supplied 35.1 per cent as against 41.1 per cent in the previous year.

It is true that Canada does more than a third of the world’s “net export” trade in wheat, but it is also true that our wheat policy has reduced our share, and that is the important point. Our whole Western economy is built upon the assumption that our high-quality wheat will continue to dominate world wheat export. If it does not, if we adopt Mr. McFarland’s policy of restriction of production under Governmental regimentation, the outlook for our prairie farmers would be blue indeed.

Mr. McFarland discusses the price chaos that followed the marketing of the 1932 crop, when his agency bought heavily of wheat. But he neglects to explain why, in subsequent years, with wheat prices at higher levels, our wheat carry-over should actually have been increasing. If his agency bought at low prices, then why has it not sold more wheat as prices have risen?

Mr. McFarland’s comment on the larger income received by Western farmers from our wheat policy ignores the discussion on this point in my article, which space will not permit my repeating.

So we come finally to his concluding point about the British market. As Mr. McFarland does not deny my statements about our losses in that market, no rebuttal is called for except to say that I think the most important fact in our wheat situation is that in the five years to July 31, 1930. Canada supplied 45.4 per cent of Britain's gross imports, while in the last four calendar years that Mr. McFarland has been at Winnipeg we have supplied 36.3 per cent. And Britain is our biggest market. We have a preference there over foreign wheats.