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July 1944 — Vol. 25, No. 7 —
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This war has brought into a clear
light the need of productive agriculture. Armies, navies and
air forces in wartime, even more than commerce, manufacture
and every other activity in peacetime, depend upon the bounty
of the earth.
There has been great progress in agriculture, "since the
first poor crooked stick was drawn across the wondering earth".
That was in the Neolithic age 10,000 years ago, but more advancement
has been made during the past two centuries than in all the
preceding thousands of years. Farming is a complicated business
today. The same basic problems as afflicted the first cultivator
- the need for sun, rain and fertile soil in the right measures
- still exist on every farm, but in addition there are riddles
associated with urbanization, price, distribution and comparative
standards of living. An encyclopedic definition of agriculture
mentions merely preparing the soil, sowing seed, removing
the crop, and the raising and feeding of cattle and other
live stock. In today's practice, the farmer's worries start
earlier and continue later than these operations.
This complexity of farm life is increasingly recognized
by urban dwellers, who are taking greater interest than ever
before in agricultural conditions. Persons who draw their
livelihood from industry realize that a large prosperous rural
population would provide the basis for widening national prosperity
through enlarged outlets for the products of urban factories.
Many of these urban dwellers visit farming country in spring
and see gardens of young vegetables, or in fall, to admire
the wide fields of grain. They are overcome with a longing
for a kind of peaceful life which appears ideal to people
accustomed to the high tempo and complicated standards of
urban society. But when these city people enquire into the
facts of rural life, they find that the troubles of city experience
are simple compared with those that must be faced in farming.
They discover, indeed, that they are becoming more and more
involved in shouldering a share of the farm load, instead
of being able to enter the wide open spaces and drop part
of the urban burden. The farm problem refuses to stay on the
farm, because the prosperity of agriculture is so vital to
the whole nation.
Canada's Farm Lands
In all Canada there are 3½ million square miles of land,
and only 550,000 square miles are "potential agricultural
land", according to the Canada Year Book. It is a fallacy,
as was pointed out in our Monthly Letter of January, to accept
low population density per square mile as prima facie evidence
of great absorptive capacity. Other factors, such as physical
environment, climate, topography, location, and sociological
surroundings must be considered. Canada's "great open spaces"
reduce, under the merely physical test of land adaptability,
to half a million square miles, of which 211,000 are already
in use.
Reduced to its simplest terms, a farm is a chemical plant,
developed by capital represented by land, machinery and live
stock. This establishment takes a few raw materials, and,
by processes which no one fully understands, turns out ham
and eggs, wheat, spinach, milk, butter, cheese, potatoes,
beefsteaks, and the other foods which enter into the needs
of the human organism and cater to its palate. To measure
the productivity of soil has been a major assignment of laboratories
maintained by the Dominion and by Provinces, because many
failures in farm settlement are due to the placing of eager
colonists upon land that is worn out or rocky, or poorly situated.
Canadian Development
Canada is a young country, and its land has not been " tilled
with the same intensity or for the same length of time as
that of European countries. The first clearing of land for
agriculture took place near Port Royal, N.S., in July, 1606,
so this Letter is being published about the 335th anniversary
of that great event. When Cartier visited Hochelaga (later
the city of Montreal) in 1535, he found extensive fields around
the present site of the Head Office of The Royal Bank of Canada
planted to corn, and the Indians were growing beans, peas,
and cucumbers in natural clearings. It is of passing interest
that the earliest public notice of farm lands open for settlement
appeared in 1632, offering opportunity for colonization on
the St. John River in New Brunswick.
It was under circumstances such as these that the size of
early Canadian farms was largely determined. Each generation
had to plan how much land it should clear and cultivate. In
later days, with bald prairie to work, the standard size was
set at 160 acres. Still later, in a reign of machinery and
railways, many quarter section farms proved to be too small
for profitable production. At the same time, the ambition
of farmers has often led them to take more land than they
could properly manage. Economic authorities say many a farmer
would gain by applying his capital and labour to a smaller
area. Abandoned farms bear witness to over—expansion
as much as to exhaustion of the land, while other farms, still
in use, are producing only a fraction of their potential capacity.
Cultivation
The subject of cultivation is one of real seriousness. Soil
is not mere dead matter, submissive to treatment or mistreatment
with impunity. Chemically, it contains elements which must
be present in certain proportions for the support of vegetation,
and physically it is made up of material which supplies the
principal plant food. These attributes are amenable, within
limits, to modification by capital and labour. In a demonstration
at Rothamsted experimental station in England, one plot has
been used for wheat every year for a century without fertilization,
and last year it yielded 26 bushels to the acre. Another plot
at the same station, properly fertilized, raised 50 bushels
to the acre. There does not seem to be any doubt that worn—out
land, under scientific culture, can be reclaimed and made
as fertile as ever, and the productivity of naturally good
soil increased. Some may point to lack of capital as a handicap
to adoption of better methods, but the work of agricultural
schools shows that there is opportunity for improvement without
large cash outlay, and that much could be done to increase
productivity by elimination of wasteful and inefficient methods
and unsuitable seed varieties. With farming developing into
an exact science, the farmer can no longer depend upon his
intuitive knowledge. He needs guidance in treating unbalanced
soil, in developing crops which will meet the varying seasons
in different parts of Canada, and in preparing and marketing
his product. This counsel is given freely by Agricultural
Colleges and by the Dominion and Provincial Departments of
Agriculture. Acceptance of it, and practice in it, will enable
farmers to cut production costs through increase in per acre
yield, and give a measure of insurance against loss from crop
failure.
Nature is slow to anger, and there is still time to arrest
the consequence of single cropping, neglect of fertilization,
and other sins of omission and commission. Man must add his
judgment to the selectiveness of nature, and to the capability
of nature he must add science, labour and investment. This
judgment involves, as well as a decision when to start intensive
culture, a knowledge of when to stop, because there is a law
of diminishing returns. After a certain point is reached the
application of new labour and capital fails to cause a proportionate
increase in the yield. If the farmer puts on additional loads
of fertilizer or employs additional men, he may raise the
total harvest, but the return per unit of capital and labour
will be less. Every farm has its own maximum of development,
and the farmer who would be successful must use all the scientific
aids of the colleges and experimental stations, as well as
his own native intelligence, to reach that peak. The man on
a farm producing 12 bushels of wheat per acre has not a chance
if the economy is geared to a yield of 20 bushels. Suppose
the price to be the same, $1.25 per bushel, and the cost to
be the same, $14.54 per acre, then the farm yielding 20 bushels
will give a net profit of $10.46 per acre; a 16—bushel
farm will give just about half, $5.46, while the profit from
a 12—bushel farm will be only 46 cents an acre. If the
yield drops to 10 bushels there is a net loss of $2.04 an
acre, and at 8 bushels the loss is $4.54. These figures are
purely arbitrary, for purposes of mathematical illustration,
and do not lay claim to any resemblance to the cost of raising
wheat. The same principles would apply to any other crops.
Field Crops
Canada's most spectacular advance, probably, has been in
grain, which held out the economic attraction of providing
a crop of world—wide food importance greater than was
necessary for the family need. Under changing conditions,
it became economical to grow crops to be fed on farms and
sold as live stock, milk, bacon, and eggs. It is estimated
that nearly 600 million bushels of wheat will be fed to animals
on this continent during this crop year, while civilian and
home military requirements of Canada and the United States
may total only 580 million bushels. On the basis of our pre—war
bread consumption, it would take Canadians about 13 years
to get rid of the amount of wheat that live stock will consume
this year.
In 1608 the whole Canadian grain crop went into six or seven
barrels; in 1943 the payments to prairie farmers for grain,
exclusive of subsidies and assistances, was $333 million,
and the estimated carryover of wheat at July 31st will be
413 million bushels. Wheat is the king of Canadian crops.
According to the Statistical Year Book of the League of Nations,
the 1941—42 crop in Canada amounted to 28 bushels per
capita, in Australia 24 bushels, in Argentina 17 bushels,
and in the United States 7 bushels.
Live Stock
Domestic animals bred for farm purposes have become of increasing
interest to farmers. In the first quarter of 1944, the output
of live stock and live stock products reached very high levels,
while dairying, a distinct branch of agriculture, has advanced
greatly. The semi—annual survey of the Dominion Bureau
of Statistics revealed at December 1, 1943, the following
increases in live stock numbers in comparison with the same
date in 1939: hogs 99 per cent, poultry 32 per cent, cattle
16 per cent, sheep 3 per cent. The number of hogs has shown
a continual increase since the first census, and the latest
estimate is 9½ million. Many farmers, upon venturing into
hog—raising, deplore the "loss" in feed. Even under the
very best practice, only about one—sixth of the ingoing
corn stays on the hog as usable human food, and the average
efficiency is much less than that. Other live stock are even
worse: good calves return one part in 12 of the food given
them, and the best full grown beeves only one part in 30.
Other Farm Products
Horticulture is a distinct and highly scientific branch
of agriculture, embracing the growing, improving and utilizing
of fruits, vegetables and trees for food and for ornamentation.
No significant amount of fruit and vegetables finds its way
into industrial uses in Canada, practically all being used
as food, either fresh or processed. While potatoes are a staple
in the diet of farm families, and nearly all farms grow at
least enough for their own consumption, there is rivalry between
provinces for the honour of producing the best commercial
potatoes. One member of parliament from a western constituency
told the House of Commons recently that if the west ever went
in for growing potatoes on a big scale it would drive the
eastern product off the market, because of size and quality.
Nevertheless, the Maritimes maintain their reputation for
fine potatoes, supported by high export demand in ordinary
times.
Canada consumes, under ordinary circumstances, about 450
million pounds of fats a year, exclusive of butter, and about
55 per cent is home—grown. Oil seeds constitute an important
crop group, forming the basis of a substantial processing
industry. They provide the base for shortening, salad oils,
soap, paint, linoleum, lubricants, and a host of other commodities
either in whole or in part. Canada's principal oil—bearing
crop is flaxseed, which supplies linseed oil as well as fibre.
Soybeans and sunflowers have been engaging attention. The
former enter into an amazing array of things - oil, sugar,
fertilizer, cattle food, vitamin B, and scores of plastics.
The objective for sunflowers in 1944 is 50,000 acres, sufficient
to keep two crushing plants in operation, supplying high quality
edible oil and protein oil suitable for stock feed.
The area growing tobacco has been increasing steadily, and
in 1942 reached a total of 79,000 acres, all but 360 acres
of which was in Quebec and Ontario.
The Farmer
So much for the products of the farm; now for a glance at
the persons who produce them. Nearly all our farms were family
enterprises in early days, using the services of adult and
adolescent members of the family and providing for their needs
out of the farm produce. But Canada has reached a point where
such self—sufficiency, even if possible, is no longer
desirable. The world of today offers many things which cannot
be made on the farm, and if the farmer wants them he must
have cash crops or else spend part of his time running the
farm and part away from it earning cash in supplementary occupations.
While self—sufficiency may be preferable to insufficiency,
and while it may be better to live on submarginal lands rather
than in city slums, no farmer should feel that he is limited
to what he is able to do today, because all science is trying
to help him realize something greater.
Of course, farmers differ greatly in ability, just like
men in cities. Some have greater knowledge than others of
soil and climate. Some are more thrifty, more energetic, more
foresighted. There are marginal men as well as marginal lands
and marginal industries, the kind of men, in whatever line
of activity, who seldom make more than a living and never
accumulate a bank account. To make a success of farming, a
man must organize his holding so as to achieve the greatest
efficiency. He must keep sufficient records to locate and
correct losing ventures, and expand and make the most of the
profitable features. He must know something of many sciences,
and a great deal about some, and he must add to what he learns
a wealth of commonsense. He must be able to put into practice
the lessons provided by the Agricultural College or Department.
He must study market trends and become enough of a mechanic
to keep the farm machinery in running order. He must develop
a philosophy capable of coping with troubles arising from
labour, insects, weather, drought, flood and war. He must
not copy slavishly the plans that work well for his neighbours,
because his farm has peculiarities of its own, and it is a
sign of immaturity to think that everything currently popular
is really good.
Farm Improvement
One factor contributing to dissatisfaction with farm life
is the absence of amenities. Many farms well equipped with
modern production tools still lack running water, electric
lights and bathrooms. Farmers have been so intensely absorbed
in the struggle to produce commodities that they have not
had time or inclination to think of comfort. Today, however,
farmers' children, especially their daughters, know something
about the ease and luxuries of city life, and are insisting
upon more comfort and beauty in their farm homes. No one knows
better than the farmer that there is a great difference between
what is physically desirable and what is economically feasible,
but many farm homes could be benefited, without great expense,
by devoting an occasional day to sprucing up and improvement.
Women have a very special problem when they live on farms.
They are home—makers engaged in productive work. If any
women in the world deserve electrification, running water
and other simplifiers of housework, the farm women do.
Marketing
Having produced, the farmer must sell, but even such a simple
statement is complicated by the fact that the farmer is both
a producer and a consumer. Many of the people to whom the
interests of the farmer are supposed to be opposed are in
truth dependent upon his prosperity to maintain their employment,
while, on the other hand, the farmer cannot go too far in
demanding price concessions without running the risk of reducing
his market and depleting his income. Every farmer must address
himself first of all to producing commodities of the quality
and kind desired by people in the place where they are to
be sold, and regulating the flow to accommodate those markets.
Diversification of farming is not in itself a guarantee of
success, but only such diversification as leads into production
of paying crops acceptable to consumers.
With farmers producing a great deal more than the domestic
market can absorb, expansion and prosperity of agriculture
can be attained only through the greatest development of export
fields. During the prewar years 1925—39, 72 per cent
of the cheese produced was exported, 65 per cent of the wheat,
44 per cent of the apples, and 28 per cent of the concentrated
milk. The need for such external sales will not be lessened
in the post—war years, for the simple reason that Canada's
population is not likely to increase rapidly to the point
where it could absorb all Canada's surplus farm produce.
Some farmers have inveighed against the regulations governing
export goods, but years of experience have shown that the
bother and cost of grading are more than offset by widened
markets and greater acceptability. It is estimated, for instance,
that the live grading system, combined with educational work,
has made for hog producers in Canada during the past several
years from $10 to $12 million a year. In addition, grading
has the effect of improving as well as selecting. From 1930
to 1939 the percentage of hogs ranked "select bacon" increased
from 15 per cent to 30 per cent, while the pounds of beef
graded red and blue increased by 137 per cent.
Farm Income
All of the foregoing - cultivation, economics, management,
marketing, and so on - enter into the main problem of the
farmer, which is precisely that of any city dweller: improvement
of standard of living. This boils down in both cases to obtaining
high gross returns relative to expenses. Farming is not the
conservative, non—gambling business it is often thought:
every crop and every head of live stock is playing for stakes,
with plenty of odds against the winning. Even the best farmer
cannot offset the effect of drought, blown land, or fluctuating
markets. But some farmers proved, during the depression, that
much can be accomplished by keeping down costs, by raising
only good animals, by using the right seed, and by careful
consideration of markets.
Some ask why the farmer who does his own work is not as
much entitled to a minimum return as the labourer is, but
the truth is that the regulation of farm prices is exceptionally
complicated because of the variation in goods, the method
of production, the bounty of the soil, and the shifting market
condition. Some governments have attempted a solution by guaranteeing
prices for farm products, which means in effect that the government
becomes the owner of the produce and must assume the responsibility
for storing and selling it. The Governor of the Bank of Canada
said recently to the Banking and Commerce Committee: "...price
control continued long enough must lead to government ownership."
The next step is to dictate what shall be grown and in what
quantity, and farmers, of all enterprisers, are tenacious
of their independence as to make it difficult for them to
accept such regulation.
Complaint has developed in recent years that farmers do
not receive their "fair share" of the national income. It
is logical that the portion going to farmers should have been
decreasing since colonial days, because at first all the national
income came from agriculture, there being no other industry
in the country. Gradually, the settlers achieved time off
from their farming to devote to other pursuits, and they progressed,
generation by generation, to make more elaborate goods and
supply additional services. With developing methods of agriculture,
a smaller proportion of the population was required on farms
to feed all the people on an increasingly better standard.
Such advancement cannot be frozen. Few will deny that the
majority of farmers live on a higher plane than they did a
score of years ago, and infinitely better than twenty years
before that. Their cash income is now a third higher than
the 1926—29 average, until a little while ago regarded
as the peak of hope for farmers, and it is more than double
the 1935—39 average. The increase of farm cash income
to a new high level of $1,397,000,000 in 1943 was at least
as much attributable to place, time and commodity utility
as to rises in prices.
Some farmers, and a few farm representatives, have spoken
in favour of inflation, an exhilarating experience which,
however, leaves an exceedingly bad taste as an aftermath.
Bigger cheques make the recipients feel better and encourage
them to increase production and expand holdings of land and
live stock. The trouble comes when the demand which caused
the inflation ends, as all war—created demand does end.
To avert runaway inflation, the Canadian government has adopted
war measures of control and subsidy. Substantial subsidies
and trading losses, financed out of public money, stand between
higher prices to farm producers and the cost of living. From
August 1939 to April 1944 the index of farm products prices
increased 78 per cent, while in the same period the cost of
living index went up only 18.2 per cent.
Industrial Development
There are new and expanding uses in view for agricultural
raw materials, because science is transmuting crops into the
basic commodities of industry. The raw material of some of
our oldest and largest industries is exclusively of agricultural
origin, but it is only comparatively recently that cultivation
of crops particularly for industry, as against utilization
of farm waste, has been seriously developed. The basic economic
idea to keep in mind is that the substitution of one material
for another means progress only if the new material is cheaper,
more abundant or more beneficial than the one it displaces.
Organization of small factories in agricultural districts
to use local raw materials and employ local workers may not
end all agricultural worries, but it should prove helpful
in maintaining a more balanced and prosperous economy, if
carried out in tune with solution of other problems.
Post—War Prospects
For their work in the war, farmers deserve the finest medals
Canada can design, and their contribution toward rehabilitation
of the unhappy victims of Germany in continental Europe will
be equally significant. Whatever developments there may be
mechanistically or technologically, farming will continue
all over the world much as it is carried out today. Using
new tools and methods, the farmer will still remain close
to the soil. He will enjoy many of the advancements made in
other fields, such as those which ameliorate the hardships
of isolation, but his work, fundamentally, will remain unaltered.
In Britain, with 40,000 skilled agricultural workers in
the armed services, the acreage under plough has been increased
by 50 per cent. Canada's record is good, too, but Canadians
have no room for self—complacency. This is an agricultural
country, it is boasted, yet in the year 1938—39 the farm
output of England and Wales was only 11 per cent short of
that of the whole Dominion*. With its intensified production,
its spreading acres of arable land, and its applications of
new methods in a way that has brought success to productive
efforts and prosperity to farmers, Britain provides an example
that can be appreciated only through war, great opener of
men's minds.
*England and Wales: $1,038,496,500
Canada: $l,170,943,000
Published by RBC Financial Group. All editions from the RBC
Letter collection are available on our web site at www.rbc.com/responsibility/letter.
Our e-mail address is: rbcletter@rbc.com.
Publié aussi en francais.
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