Chapter 6

STABILIZATION AT LAST: THE NATURAL PRODUCTS MARKETING ACT AND FINAL CONCLUSIONS

The federal Natural Products Marketing Act of 1934 was the culmination and the answer to a decade of agitation in the Okanagan for a better system of marketing fruit. The Act is usually dismissed by historians and other analysts as being just one of the various pieces of R.B. Bennett's 'New Deal' package, a panic move by a government afraid of impending elections. As such it has received little attention, apart from that of agricultural economists more interested in the distributive machinery it set up than in the reasons why it was drafted and passed in the first place. Such neglect is unfortunate, for its genesis and impetus came from different sources than the Bennett New Deal, and preceded the inception of that program by many months.

The atmosphere in Canada had since 1929 become more favourable to government regulation of agricultural marketing, as even traditional opponents were unable in Depression conditions to operate profitably. Thus marketing legislation had as unlikely a supporter as J.S. Roger, president of the Canadian Fruit and Vegetable Jobbers Association, who called for legislation similar to the British Marketing Act (which allowed the government to set prices and production quotas when a majority of both producers and processors agreed) when he spoke to the annual convention of the Canadian Chamber of Commerce in October of 1933.¹

The changed atmosphere was reflected in the changing pronouncements of politicians. At the National Agricultural Conference of August 29 to September 1, 1932, Robert Weir, the federal Minister of Agriculture, suggested that "we have given too much attention to some of the questions of production, and not enough to the question of marketing."² During the summer of 1933 meetings at Regina of agricultural leaders and politicians of the four western provinces, including Premier Tolmie, discussed proposals for Dominion marketing legislation.³ Prime Minister Bennett indicated his willingness to act, within the limits of federal powers, and promised to investigate those limits.⁴ One result of his investigation was the Natural Products Marketing Act.

Although, in its finished form, the Act allowed for provincial marketing boards of all farm products except grain, and for other natural products such as lumber and fish, its original intentions were humbler. It was at first intended to apply only to dairy products and fruit, but because of the difficulty of defining the exact range of products, the drafters avoided the problem by including everything in the bill and leaving the detailed definitions to the administrators of the schemes.⁵

The initiative for the Act came from the dairy and especially the fruit farmers of British Columbia. This pressure was expressed through the Hon. Grote Stirling, MP for the constituency of Yale (which included the Okanagan), who was generally acknowledged as the father of the bill.⁶ He described his principle as "that the producer should have in his own hand the power of conducting the marketing of his produce in an orderly fashion and this cannot be done until there is a majority rule of the minority."⁷

Stirling was a veteran member of Parliament, having held his seat for the Conservative Party since 1924. He was personally respected by members of all parties as representing his constituents as much as his party, and as a member who spoke seldom but was listened to when he did.⁸ Later in 1934, he was called to the Cabinet to serve as Minister of National Defence. Bennett was therefore willing to make a concession to placate Stirling and his constituents on what appeared to him a matter of only local import.⁹

The Natural Products Marketing Act had a slow passage through the Commons, strongly opposed by Liberals who claimed that it was not really a government bill at all, but an electioneering trick, a child "born of the farmers and producers, of western Canada particularly, and especially of the Pacific coast."¹⁰ The leader of the opposition, W.L. Mackenzie King, strongly denounced the principle "of creating monopolies of producers in particular occupations, special groups controlling production and sale of different classes of products and commodities."¹¹ But the bill was finally passed into law on July 3, 1934; the British Columbia Legislature had already passed enabling legislation so that it could come immediately into operation.¹² The urgency of the Okanagan fruit growers may be seen in the fact that theirs was the first commodity scheme to be approved, coming into effect on August 28, 1934.

The Local Board is empowered to regulate the time and place at which the tree fruits grown in the Interior of the province may be marketed; to determine the quantity and quality of the fruit marketed; to assess and collect tolls to defray expenses; to pool the proceeds from the sales among the shippers.¹³

The growers showed that their confidence in their leaders during the stabilization campaign still held, even though that campaign had failed in the courts, by electing for three years in succession a Local Fruit Board consisting of Haskins, Barrat, and Hembling, formerly the three executives of the United Fruit Producers' Association.¹⁴

The federal Natural Products Marketing Act was disallowed by the courts in 1936, but the provincial legislature had already passed amendments to its own Act which permitted it to remain in operation for "regulation and control in any respect or in all respects of the marketing of natural products within the Province, including the prohibiting of such marketing in whole or in part."¹⁵ The Board, whose main power was in maintaining prices by regulating the rate of release of fruit by the shippers, continued in operation; but the growers still pushed for a return to centralized selling. An experiment with one-desk selling in the latter part of 1938 was successful enough that the B.C.F.G.A. convention of January 1939 voted for a scheme to cover all shipments in 1939. Under this plan, B.C. Tree Fruits Limited was established as the sole selling agency for Interior fruit. The heritage of the growers' campaigns governed its form as a one-desk selling agency with pooled returns which was entirely controlled by the B.C.F.G.A.; the shippers, independent or cooperative, had no hand in its governance and became purely packing and handling concerns without any part in merchandising the fruit.¹⁶ Prices did not rise to the levels of the 1920s until the midyears of the Second World War, but they held steady and well above the rock-bottom of 1932.¹⁷ At last the marketing of fruit had been stabilized.

The Growers' Strike of 1933 was a pivotal point in the history of Okanagan fruit marketing. The slogan, 'Grower Control--Minimum Price', highlighted what might be termed radical about the growers' plan. Demands for one hundred percent stabilization among shippers were not new; neither were calls for legislation to create marketing boards. But for the first time producers demanded 'Grower Control'--a say in how their fruit was distributed, so long as they had an undischarged monetary interest in it. In past they had been willing to hand their fruit to a shipper and accept whatever it brought. The second phrase, too, was a departure-- 'Minimum Price'. Before, the shippers were begged to get the best price possible on the market. Now they were directed to get a minimum price, based on the cost of production...or not to sell at all. The growers thus rejected the entire pattern of distribution as it stood, with the individual producer, whatever the marketing system, taking all the risk of loss in distribution but receiving only what return remained after all the other factors had taken their cut. Instead, an 'interest group' should control distribution of fruit up to the point where it was actually exchanged for cash, and ensure returns based on production value rather than on market prices. The 'competitive inferiority' of the producer would thus be eliminated.

But the growers' strike was not really radicalism, not really a movement convinced that the existing economic order was obsolete and must be replaced. Rather it was in fact no more than an expedient of people frightened by economic conditions which seemed to jeopardize their livelihood. The struggle might be one between free enterprise and monopoly or even socialist control, but it was a struggle wholly within the context of the marketing of fruit; so far as the growers were concerned it bore little or no relation to their attitudes towards the rest of the world. The lack of connection between the 'radicalism' of the strike and general political and economic principles is demonstrated by the lack of support for radical political movements in the Okanagan in the period, by the absence of political rhetoric from the growers' leaders, and by the readiness of the growers to revert to their traditional concerns when the government was persuaded to step in. The growers' strike took the methods and style of radical action without absorbing the political principles associated with it.¹⁸

A low degree of 'theory' was visible throughout the debates about marketing; few of the participants understood how the system worked, and arguments tended to be on emotional rather than intellectual grounds. As W.E. Haskins is reported to have complained, when he spoke about marketing systems and economics no one paid much attention, but when he attacked the shippers with their big houses on Water Street the growers would stand up and cheer.¹⁹

This lack of understanding of how the distribution system functioned had definite results for growers' organization. The producers concentrated their attention on the shipper, the only link of the distributive chain with which they had contact. Growers attributed much greater powers to the shippers than they actually had, and believed that, if only all of the shippers and one hundred percent of their tonnage was controlled, every problem would be solved, as if there was no outside competition. The growers and their leaders were little concerned about the brokers and jobbers, even though two combines investigations showed that the concentration of ownership in a few conglomerates led to practices distinctly harmful to the interests of the producer. These companies were too far away from home--it was the shipper, the man who made the payments which determined the grower's wealth or poverty for the next year, who seemed to the grower most powerful.

The lack of understanding of economic and political theory was part of a definite anti-intellectual current among the growers. This was especially marked among independents, as is shown by the opposition of the Independent Growers' Association to university experts and by the large proportion of the letters to the Premier attacking central selling and control plans as nothing more than schemes by 'experts' to draw fat salaries.

In part the lack of respect for government and university experts was likely due to the failure of those experts to come to grips with the problem of marketing. Then, as is still to a large degree true today, government agriculturists concerned themselves almost exclusively with matters of technical efficiency and the economics of production. The fruit growers' organizers and leaders, on the other hand, tended to resist consideration of the efficiency of production and handling as part of their problems, and instead relied almost entirely on manipulation of sales organization to find solutions. There was no common meeting ground.

Therefore discussions of marketing in the Okanagan tended to come down to a few drastically simplified arguments--basically an emotional and personal decision between the freedom of the individual to use and dispose of his property as he saw fit, and the right of the majority to prevent the minority from behaving in a fashion detrimental to majority interest. E.D. Barrow told the B.C.F.G.A. convention in 1928

It sounds very fine for those who have the education and command of the King's English to write letters on abstract principles as they might apply to legislation, but that does not settle our difficulties that we are faced with in the carrying on of our own business. (Applause) We cannot afford to be controlled by abstract principles when we have to deal with concrete facts....the interest of the State at large is of greater importance than that of the individual, and what we are trying to carry out in connection with the marketing of our food, is a system that will be to the advantage of the people as a whole, and we deny the right of any one individual or any insignificant minority to conduct their affairs so that they will nullify the efforts that are being put forth by the majority for the benefit of the people as a whole.²⁰

The Okanagan fruit industry existed in an almost continual crisis of distribution, brought about by a continually expanding crop which required the selling of ever-larger quantities of fruit in a relatively static market. New expedients to deal successfully with one season's crop were invariably swamped by the following season's record-breaking production. In this situation, a faith grew, based on the realization that uncontrolled open competition was sure disaster, that the only possible answer was complete centralized control of the Okanagan crop--call it one hundred percent stabilization, compulsory cooperation, or central selling, or whatever you wish--to allow orderly marketing without price-cutting. It is not certain that this idea was entirely right; even had every apple produced in the province gone through the controlling agency, that agency could not have dominated the market, for much of the supply, especially to the Prairies, came from eastern Canada and the United States. As long as those regions were in competition, even one hundred percent control of the British Columbia crop could not guarantee stabilization.

The significant thing is that the vast majority of growers came to favour a system of 'collective bargaining' to overcome their 'competitive inferiority' in the distributive system, and that they were able, by the weight of their determination and mass opinion, to prod government into giving legislative authority to their efforts to force the minority to submit to the will of the majority, thus spurring the formation of our current State-sponsored marketing monopolies for agricultural marketing.

The Growers' Strike of 1933 brought an end to one era in the history of the development of marketing organization in the Okanagan fruit industry. When finally the growers became desperate enough to take matters into their own hands, they sparked government action which took the matter once more out of their hands. Ever since then government has more or less accepted a responsibility for bringing into being and enforcing centralized marketing. And in recent years, particularly, there has even been a tacit government guarantee of a minimum price through such expedients as 'Agricultural Stabilization' and 'Farm Income Assurance.' Growers have often major or even controlling voices in the various marketing boards and agencies, but they have the comforting reassurance that, if difficulties arise, not only will they be able to call on government, but that some action will be forthcoming. Thus, although in fashion other than originally envisaged, the movement for 'Grower Control--Minimum Price' succeeded- -but by government fiat rather than by the radicalism of the producers.

¹ Alvin Finkel, Business and Social Reform in the Thirties (Toronto: James Lorimer, 1979), p. 46.

² National Agricultural Conference: Called by the Honourable Robert Weir, Minister of Agriculture, Ottawa: Held at Royal York Hotel, Toronto, August 29 to September 1, 1932 (Ottawa: Department of Agriculture, 1932), p. 19.

³ Paul W. Clement, "The Operation of the Natural Products Marketing Act in the Okanagan Valley" (unpublished BSA [Horticulture] graduating essay, University of British Columbia, 1936), p. 11; and "Unionist Party of British Columbia Speakers' Handbook", p. 107. See also letter from Tolmie to R.H. McDonald (president of the B.C.F.G.A.), Aug. 7, 1933, in which the Premier promises "to render every possible assistance in bringing about Federal legislation which will adequately cover our requirements and prevent disaster to this important industry." S.F. Tolmie Papers, Box 20, file 26, "Speech Material-Agriculture".

⁴ Vernon News, Oct. 19, 1933, p. 4.

⁵ Canada, House of Commons, Debates, June 4, 1934, p. 3664, cited in H. Blair Neatby, William Lyon Mackenzie King: 1932-1939: The Prism of Unity (Toronto: University of Toronto Press, 1976), p. 58.

⁶ J.R.H. Wilbur, "R.B. Bennett as a Reformer", Canadian Historical Association Historical Papers 1969, p. 107; and "Sterling Stirling", Province, Nov. 30, 1934, Sunday magazine, p. 2.

⁷ Canada, House of Commons, Debates 1934, Vol. II, pp. 2254-2256, cited in J.R.H. Wilbur (ed.), The Bennet New Deal: Fraud or Portent? (Toronto: Copp Clark Pub. Co., 1968), p. 41.

⁸ E.C. Weddell, "The Honourable Grote Stirling, P.C.", Seventeenth Report of the Okanagan Historical Society 1953, pp. 10-11.

⁹ Neatby, Mackenzie King, p. 58.

¹⁰ Hon. W.R. Motherwell, in Canada, House of Commons, Debates, 1934, Vol. III, p. 2903; Vol. IV, p. 3666.

¹¹ Quoted in Finkel, Business and Social Reform in the Thirties, pp. 51-52. It is interesting that King later changed his attitude and hoped that the legal validity of the Act would be upheld by the courts. Ibid., p. 56.

¹² Ormsby, "Fruit Marketing", pp. 95-96.

¹³ W.C. Hopper, "The Natural Products Marketing Act, 1934--II: Notes on the Administration of the Act", Canadian Journal of Economics and Political Science, I:3 (Aug. 1935), p. 476.

¹⁴ F.M. Clement, "How the Natural Products Marketing Act Operates in British Columbia", Proceedings of the Fourth International Conference of Agricultural Economists (London: Oxford University Press, 1937), p. 348.

¹⁵ Quoted in Ibid., p. 342.

¹⁶ MacPhee, Report, p. 35: and see A.K. Loyd, "Marketing Fruit in British Columbia", Twelfth Report of the Okanagan Historical Society 1948, pp. 180-185 for a description of the operation of B.C. Tree Fruits Ltd.

¹⁷ MacPhee, Report, p. 104.

¹⁸ S.M. Lipset wrote in relation to the CCF agricultural policy in Saskatchewan: "Most CCF leaders assume that if farmers are given economic security and increased social services they will continue to support the movement in its efforts to socialize the rest of the economy....In fact, the contrary seems to be true--farmers tend to become conservative when they achieve their economic goals. The farmer is radical vis-à-vis the larger society when his economic security and land tenure are threatened....However, once the farmer achieves these immediate goals and becomes a member of the secure property holders of society, he resents government controls and labor or tax legislation that interfere with the expansion of his business." Agrarian Socialism, p. 276.

¹⁹ Statement by W.R. "Bill" Carruthers, retired realtor, in a personal interview, Kelowna, August 2, 1978.

²⁰ E.D. Barrow, "Marketing Legislation", B.C.F.G.A. Annual Report 1927, p. 37.

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