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Interest rates rise on farm supply accounts

Our History: March 1980

Interest rates rise on farm supply accounts

That’s 1.75 per cent per month, not per year, if you had overdue accounts with Manitoba Pool in March 1980. In a speech in Washington, U.S. Secretary of Agriculture Bob Bergland blamed current low grain prices on high interest rates rather than on a reduction in exports due to the embargo on grain exports to the Soviet Union which President Jimmy Carter had imposed after its invasion of Afghanistan. Bergland said customers were reluctant to buy because of the high costs of financing inventories. Manitoba Premier Sterling Lyon called for the four western premiers to meet with the governor of the Bank of Canada to discuss the high rates, which he attributed mainly to a high federal deficit.

As today, grain transportation was in the news that month. Thunder Bay was set for an early opening, but a Cargill trader expressed concern about a shortage of lake vessels for the coming season. At a meeting in Winnipeg, CN president Ron Lawless welcomed the decision by the three Prairie Pools to support a change in the Crow rate for the railways, but warned that more efficiencies were needed in the system and that more hopper cars were not the only answer. However, more hoppers were on the way — late in 1979 the wheat board had made the controversial decision to buy 2,000 hoppers with producers’ money, and our March 13 issue featured a photo of Premier Sterling Lyon and Agriculture Minister Jim Downey standing on one of the 400 cars that the province had leased for the grain fleet.

In the same issue Downey announced that orders-in-council had been passed to allow Manitoba chicken producers full participation in the national marketing agency. However, producers were concerned about overproduction and low prices — the Manitoba chicken producers’ annual meeting heard that Canadian stocks in storage had risen from 29.1 million pounds in 1979 to a “disastrous” 43.1 million pounds in 1980.

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