Lethbridge Herald, The (Newspaper) - March 22, 1974, Lethbridge, Alberta
4 THE LETHBRIDOE HERALD Friday, March 22, 1974 The fertilizer project The promoters of the large fertilizer operation planned for this area made a monumental blunder if in fact they did not take the provincial government into their confidence early in their planning. With governments more and more involved in not only the direction but the operation or control of industry, with energy being such a touchy question right now and with Canadian-U.S. economic interaction hardly smooth, it is inconceivable, that alert business interests, Canadian or American, should go very far before soliciting the goodwill of both the provincial and the federal governments. But apparently that tactical blunder was made. Now what? Whether gas is exported in the form of gas or in the form of ammonia doesn't really matter in the contest of Alberta's (and Canada's) gas export policy. If the amount involved might have been1 exported meaning it was surplus to Alberta's foreseeable needs, then there is no harm in its export as ammonia. Indeed, better that it go "out as ammonia, for two reasons: One, it involves some measure of processing here, and that means some additional employment and wealth to the province. And secondly, fertilizer is an excellent use for it. The world is almost certainly entered upon a period of famine, and the most urgent of all international concerns (apart from maintaining peace) is producing all the food possible. Food production levels have been maintained at high levels only because of the -application of large amounts of fertilizer. Now fertilizer supplies are as short as those of so many other essential commodities. It is imperative that Canada do what she can to help maintain food production anywhere. Selfishly to deny Americans Canadian fertilizer can hardly be justified. Yet Canada is short of fertilizer too, and it is justifiable to use this project to augment Canadian supplies. The plants as proposed will not manufacture fertilizer, it should be understood. They will manufacture a liquid which will be transported by pipeline to the U.S. where the fertilizer will be made. To insist that some of the liquid be made, available to Canadian industry for the manufacture of fertilizer for Canadian farmers is reasonable, and there is little doubt that both governments will so insist. However, that implies that a facility for the final process will be available. To insist on the final processing for the American market being done here is not so reasonable. It would mean more investment here, more jobs both temporary and permanent, but also more of the nuisance of heavy industry. Furthermore, the final fertilizer product would have to be moved to the U.S. market by rail, and the railways, both Canadian and U.S., are showing they can't handle all the goods they are now expected to move. What of the economic nationalism that still infects so many Canadians, the paranoia about American investment coming into Canada? Canada owns the gas and will always control its development. As for extracting and developing it, a project like the one proposed could not be financed without American money. If it is debt rather than equity money, leaving the "ownership" mostly to Canadian money, as seems to be the plan, then the objection about American ownership of still another new Canadian industry would seem to have been met. So the profits, as opposed to interest on the debt, will stay in Canada if indeed it is Canadian-owned. But what if it is not? Profit seems to have become one of the most obscene words in the English language. But until Canadians learn how to satisfy their needs without capital, they had better understand that if there is no reasonable hope of profit there will be no capital. Scottish oil The British election has provided Scottish Nationalists with a certain amount of bargaining power in their attempts to get control of natural resources, that is to say, North Sea oil. The concessions they will manage to extract will depend on how much the Labor government needs their votes. Their demands are stringent, as could be expected. The SNP insists that the oil belongs to Scotland and it should get all the royalties and revenues. It demands that annual production be limited, to conserve resources, but also producing enough revenue to equal or slightly exceed the amount of money allocated to Scotland by Westminister in addition to that spent by local administrations in Scotland. Under this stipulation, England would be the prime customer -and the production limit would also be such as to make it independent of Middle East oil. The SNP demands more local participation and creation of a Scottish state petroleum company with rights to a 50 per cent interest in every successful field, for which it would pay its full share of exploration and production costs. Whatever he may have to concede in order to get votes, Wilson will be under strong pressure not to limit production, since Britain badly needs the foreign exchange earnings which would come from selling the oil. There is also the argument that the oil should be pumped as fast as possible and should be sold while the price is right, before other sources of energy and other fields cut into the market. It's easy to believe that Britain needs foreign earnings, but it is a little hard, considering the' industries which are dependent on oil and oil by-products, to buy the idea that there will ever be a time when it is not in enough demand to bring a good price. The SNP borrowed some of its demands from the Norwegian experience, where exploration licenses were granted at a deliberately slow pace in order that an indigenous exploration and development industry could come into being. At the present time the handling of the North Sea oil boom by Britain is s.uch that Scotland is getting an influx of capital and large numbers of low-echelon jobs and paying for it with social and environmental problems, Britain is getting (or will get) the oil, and foreign owned oil companies are getting the almost untaxed profits. Pre-election terminology called the tax concessions a scandal and though the policy could be traced back through both Conservative and Labor governments, the Heath government became the natural scapegoat. Given Alberta's dependence on oil revenues and the current Canadian interest in the ability of minority parties to parlay pint-sized voting blocs into positions of political power, there should be considerable interest in the SNP success (or lack of it) in parliamentary manoeuvres. Viewed from this province, their demands do not look outrageous and may be the best bargain Wilson can find. "Let's go home, honey... I don't think Lethbridge is ready for us Orderly marketing vs free enterprise By Fred Cleverley, Herald special commentator WINNIPEG "Orderly is a phrase which may be a little vague in definition to consumers in Eastern Canada or on the west coast, but the fight to establish such marketing for prairie agricultural products may soon be reflected in the supermarket prices these same consumers are forced to pay. Nowhere is the fight for "or- derly marketing" being fought more strongly than in Manitoba, where Agriculture Minister Sam Uskiw and his deputy, William Janssen, have been accused of outright lies in their efforts to have farmers vote in favor of a provincial feed grains marketing board. First of all, it should be ex- plained that "orderly market- is freely translated by its opponents as "total government control." These opponents, including a sizable block of the agricultural community, claim that such control doesn't really help the producers, and plays havoc with the consumers. It was the "orderly market- ing" of eggs by the Manitoba Egg Producers Marketing board that brought national criticism from Mrs. Beryl Plumptre, chairman of the Prices and Incomes commis- sion. Mrs. Plumptre charged that Manitoba had arbitrarily cut back its egg production to maintain artificially high prices in other parts of Canada, and at the same time was selling its surplus at fire sale prices to the United States. It was the "orderly market- ing" of pork by the Manitoba Hog Producers Marketing Board that touched off a virtual revolt among hog when they discovered that the government appointed board had signed a three-year con- tract with Japan which was consuming vast numbers of hogs at prices below current market levels. The Manitoba government has consistently refused to reveal details of the contract, but producers esti- mate it is costing them more than a day to support it. These are two examples of how "orderly marketing" can harm both consumers and pro- ducers. There must be a careful examination of the makeup of marketing boards and their powers. In Manitoba, so far, the government has not followed through with its promises to have established boards made up of freely-elected members, and has preferred to appoint the majority of the men who make the marketing decisions. Perhaps this factor adds to the opposition the provincial government is facing in its lat- est attempt to bring feed grains under a provincially- established marketing board. The government has mailed out ballots and a covering letter from the minister, Mr. Uskiw, to holders of Canadian Wheat Board permit books (these include all grain producers in the The opposition spokesmen claim such a board will in- crease both the price of Mani- toba cattle, and the price of feed which eastern producers have to purchase. They also claim that once the bridgehead is established in Manitoba, the NDP government of Saskatchewan will be quick to follow, thus tying up the major areas of feed grain production in Can- ada. The basic question, of course, is the value of state control as opposed to a free enterprise system. All parties agree that the era of cheap agricultural food in Canada is at an end. Those opposed to "orderly marketing" claim that prices will continue to rise, and will be maintained at the higher levels, if governments interfere with the normal situation of supply and demand. In. addition, they claim that the small championed by the will be squeezed more by an "orderly marketing" system than he would under free enterprise. A mandatory cutback of "an egg 'producing flock by 20 per cent would mean that the 5.000-bird farmer would have to go under. The Manitoba government does not accept these argu- ments, and appears to be determined to expand the "orderly or control of agricultural production as widely as possible. The real danger to other Ca- nadians in the Manitoba government's plan to control the marketing of provincial products is the threat to the basic guarantees of the Canadian constitution that there should be free trade between provinces. Such free trade cannot exist once provincial governments control the production and pricing of a commodity. This has already been pointed out to Manitoba by Otto federal minister responsible for the Canadian Wheat Board. Mr. Lang accused the Manitoba government of using "threats" and "red herrings" in an attempt to gain a favorable vote among feed grain producers for a provincial marketing agency. The real irony is that the same Manitoba government two years ago successfully appealed to the Supreme Court of Canada to break the control Quebec imposed on the importing of eggs from other Canadian sources. Manitoba argued then that no province should be able to restrict trade. EEC unions join attack on farm policy By David Haworth, London Observer commentator BRUSSELS Britain could well find itself pushing against an open door when it makes its expected attack against the European Economic Community's common agricultural policy. The West Germans have already indicated their own attitude towards any efforts Britain makes in this direction: Finance Minister Helmut Schmidt has said he hopes for "some reappraisal and some reform" of the policy, adding: "I think that it is a point of British interest to see to it that agricultural prices do not rise too high within the EEC." And now trade union members of the EEC's economic and social committee are threatening to raise their hand against the Common Market's "sacred cow." In a committee debate on farm prices, the unions led a strong attack on the traditional and highly inflationary approach of supporting farmers by raising prices. They were encouraged in this attitude by representatives of Europe's consumer organizations, the professions and employers, who helped them defeat an attempt by the EEC's agricultural interests to get support for vastly higher prices. This procedural defeat for the farmers is less significant than the underlying and growing pressure for fundamental changes in the 15-year-old system, which was Wheeling, dealing Whelan By Oian Cohen, syndicated columnist 'Those living ovt there probably don't realize it but the government has cleverly arranged for them to help yos pay for this steak." MONTREAL The agriculture minister who can be the friend of the fanner and the consumer at the same time has earned himself a special mention in Canadian political history. At first blush, Eugene Whelan seems to have pulled it off. The million a week subsidy to cattlemen he announced last week will keep prices down for consumers and up for producers. But only for a snort time. The longer term outlook is that the price of beef will rise and stay expensive. Three years ago, grain producers were near bankruptcy because grain prices were so low. Cattlemen, who use the grain to fatten their produce for market didn't complain. Not then, nor during the following two years when cattle prices almost doubled, far outstripping the rising cost of feed grains. Bat now the cattlemen are in something of a bind. The steers they are sending to mar- ket today were bought last fall at the height of the market. Prices have fallen since then. What was bought for 60 cents a pound and fattened on more expensive grain, now sells for 50 cents a pound. Further complicating life for the cattlemen has been American imports. U.S. producers can raise beef cattle consistently cheaper than Canadian producers. When American cattle are allowed into Canada, the price of ALL beef goes down. This has been shown dramatically in the last few months. When Ottawa has put import surcharges on American beef making it more expensive beef prices have gone up within 10 days When the surcharges come off. the price comes down. At the moment the surcharge is off and prices are down. The subsidy to the cattlemen is keeping them from howling for a few weeks so the government has time to manoeuvre. The manoeuvre Mr. Whelan has indicated he will try is a treaty with the United States restricting imports to both countries. The U.S., Mr. Whelan feels, should take 400.000 of our cattle and we will take of theirs. Last year we imported more than 290.000 head of American cattle. The Whelan formula implies there would be fewer head of cattle in Canada and shortages always mean price rises. Canadian consumers should hope the Americans don't accept the Whelan formula, for it is only one of several factors which indicate rising prices for beef. Inflationary psychology is also at work retailers know we'll keep on paying the prices we became accustomed to last summr They have regularly failcr 'o pass on to consumers the lower prices they are paying. Of course, Mr. Whelan can keep subsidizing the Canadian cattlemen forever. Then we'll be baying oar beef with oar taxes, but it won't show up in the consumer price index. designed to help the Community's poor farmers and whose principal achievement has been only to enrich the prosperous ones. The policy is designed to keep the farmers', income at a steady level by 'maintaining high prices for their produce irrespective of the forces of supply and demand. Overwhelmingly, the economic and social committee believes that other systems, such as the much cheaper British deficiency payments method (which makes up farmers" losses when prices fall while still giving the benefit to consumers) or direct aids to production, could benefit both fanner and consumer far more effectively. The committee goes on to say that any farm policy will be constantly at risk as long as economic and monetary union is delayed, there is no common transport policy, and in the absence of "decisive progress" in regional and .social policy. To that extent there is agreement with the European commission's view, namely, that it would be wrong to blame the farm policy for .some of its deficiencies for which it cannot be held solely responsible. Nevertheless, with the rudeness of the little boy who perceived that the emperor had no clothes, the committee's non-agricultural representatives point out that the farm policy should benefit every economic sector in the member-countries. It cannot, in other words, be treated as an elaborate welfare system for a lucky minority of farmers. They add that farmers themselves find that the "price" and "market organization" components of the CAP have had an uneven impact on fanning incomes both between one region of the Community and another and between one production sector and another. They are also similar differences, between farms in the-same production sector. Why. they ask, and is this fair? The EEC employers and unions say they consider it "essential that member- States change fundamentally" the attitudes towards the farm policy they have displayed until now. As EEC officials admit, this is only another way of saying what is implicit in the British Labor government's desire to see urgent adjustments and reforms in a system which is becoming unacceptably expensive for all its participants. The Lethbridge Herald 504 St S LeJMxridge. Alberta U-TWBRJDGE HERAiO CO LTD Proprietors and PtfrtiSners Second Class Man Registration No 0012 CLEO MOWERS. Editor and Publisher DON H PILUWG OONAIO R DORAM Managing Editor General Manager ROY f. MILES Advertising Manager DOUGLAS K WALKER Editorial Page Editor ROBERT M FENTOM GirciAfliOT! Mariager KEJWETH E BARWETT Business Manager HERALD SERVES THE SOUTH"