l_’a ge 1 -1.. The Guardian
Wed., ll/Iziy 14, 1958
Vertical Integration ls Home And Bane Of Farmers
By FRED CHAFE Canadian Press Staff Writer TORONTO (CPl —— A phrase
zhat ‘xould make many a farmer shudder is being tossed around considerably these days by On- tario agriciltural in-terests.
The term is vertical integration. The experts use it when they dis- cuss economic growth and the way farming is fitting more and more into the pattern of big busi- ness.
The farm groups are concerned over the financial reasons behind its development and the changes it may work on the farrner’s tra- ditional role as an independent operator.
ONE OPERATION
Vertical integration is a system that ties the production, mzrket- ing and processing of agricultural commodities into one big opera- tion from producer to consumer.
It has been developed to a peak in the Ontario poultry business, where there are three-way agree- ments between feed suppliers, farmers and processing houses. In the hog field, it is reflected to a lesser degree in contract farm- ing, a more familiar phrase around the barnyard.
Most systems involve credit to some extent because the particip- ating farmer is either unable or unwilling to finance his own op- erations. In simple hog - feeding contracts, the farmer wonks for a salary and owns neither the an- imals nor the feed in his barn.
Feed companies, dealers and f a r in organizations generally agree that contract systems are increasing. Opinion is not unanim- ous that it is a good thing in the long run.
A sales executive of in big mill- ing firm described credit plans as “dynamite” from the company viewpoint but explained their growth as an outcome of the in- creasing trend toward bigger farm operations for reasons of economy and efficiency, and its attendant demands for financing. IN EARLY STAGE _
Without help, he said, many young farmers would have trouble getting on their feet.
“It’s sort of in its starting stages,” said another company official. “ht’s a little hard to pre- dict how far it will go."
Agriculture Minister W-illia-m A. Goodrfellow of Ontario says “there l-s no question but that the former is caught in a squeeze. His costs have risen out of all proportion to his prices.”
He notes a trend to specialized tarming and says it looks as though there will be vertical in- tegration in fields, where the farmer cannot finance his own operations.
As to his departments views on integration:
“We are not objecting to it nor are we endorsing it. We’re study- ing it. We want to become con- versant with the various systems so that we can help farmers com- ing to us for information and ad- vice."
One of the com-pla-ints some farm groups have ‘about the growth in contract systems is that business firms are entering fields that were once the pre- serve-of the farmer.
FAVOR C0-OPERATIVES
While not denying that some form of integration may be nec- essary under today's economic conditions, they claim that fa-rm c-o-operatives, rather than corn- mercial interests, should run the show.
Charles W. Mclnnis, president of the Ontario Hog Producers’ As- sociation, says integratlon pro-
moted by non-farm interests ‘'rel-, ‘
egates farmers to the position of‘ sharecroppers."
Alden McLean. president of the United Co-operatives, of Ontario, stresses that integration involves “control by one management of more than one stage in the pro- duction, marketing and process- ing of a farm product.”
Vertical farming “is all right from the farm up,” he says, “but not all right when it operates from the pa=c-king companies down."
While it spreads some of the risk from the farmer to large firms, Mr. McLean says, the farmer in turn abandons h-is free- dom of choice in purchasing sup- plies and making management decisions for the role of a laborer without good security.
He suggests that farmers de- velop producer-control-led co—op- eratives to process and market their products, dbtain production supplies and achieve the advan- tages of vertical integration un- der farm control.
ANOTHER VIEW
Farmer Alfred Leatherbarrow of Elora opposes the contract system for another reason. He says it is for farmers “who are almost bankrupt” and thus in no financial position to care for their land properly. lMr. Learthernbarrow, who im- proved a margin-al farm within 10 years to the point where the On- tario Agricultural College has used it as a demonstration pro- ject, contends that 60 per cent of Canadian farmers operate un- economic farms on which they cannot afford to practise good conservation methods.
He told the Meat Packers Coun- cil of Canada early this year that rather than encourage contract feeding plans as they now exist, it would be better for the big packing companies to buy farms of 1,000 acres or more, operate them on a sound. conservation basis and hire farmers as em- ployees.
He didn't propose this as a de- sirable state of affairs, he ex- plains, but as the lesser of two evils.
“It the companies are going to come in the back door, they might as well go around the trout and take over.”
Dog Kills Small Child A
TORONTO (OP)—A doberman plnscher dog Monday bit through the throat of his owner’: two- year-old son and killed him in the backyard of the family’: sub- urban Scarborough home-
Gerald Pratt, son of Mr. and Mrs. Gerald Pratt, Sr,, was found about an hour after a scream was heard by neighbors.
The dog, King, was one of two dobermans the Pratts kept for
breeding purposes. He was shot to death by Mrs, Pratt in their basement at-ter she discovered the tragedy.
Police said they have sent the riddled head of the dog to the Scarborough dog pound for exam- ination for rabies.
SMALL START Canada in 1663 had a white pop- ulation of about 2,500 along the St. Lawrence near Quebec, Troi~s- Itivieres and Montreal.
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