CWB and the Export Manufactured Feed Agreement

[parsley]

The pasta producers who applied for export licenses (without the buyback) were refused because, according to Ian McCreary on page 10 of last week's Western Producer, 'the concession would have lowered pool returns for other farmers'. He doen't seem to apply the same rules to the big feed mills though. The CWB and big feed mills have a sweet deal called the Export Manufactured Feed Agreement. The mills buy wheat and barley directly from producers , mix it up with 25% oats etc.or whatever, roll it or grind it or steam it etc. , and apply for an export license and bingo, they get one without doing a buyback. Even the strong Board supporters are wondering why the Board isn't marketing this wheat and barley and pooling. But they're not, and directors like McCreary have a vote on whether their Export Feed Agreements get renewed. The farmer can't get a license, The pasta-durum producer is denied. We all know what happened to the grandin wheat grower. Tom Halpenny, why are producers denied export licenses when the big feed companies are granted them?

[oilcan]

The export of products manufactured from wheat or barley requires an export license. Only if the amount of wheat or barley is LESS than 25% by weight is an export license not required. This agreement is not only available to the large feed mills. If a farmer is in the business of preparing feedstock, which contains less than 25% wheat or barley, he is eligible for this as well. Concerning the export of durum which is also referred to, the point of having a Producer Direct Sale (buyback)process is this. BY virtue of having a single seller of western Canadian wheat or barley, it allows the CWB to price differently to different markets where possible. This creates price premiums over what would otherwise be available. The CWB has the legislative responsibility to capture this benefit for all the farmers in the pool accounts, rather than permiting farmers to selectively bid down those premiums and capture the benefit individually. The big source of the problem is that farmers must adhere to this policy for it to work. But be assured that on any day, there would only be one price available to farmers at the elevator in the absence of the CWB. Would farmers capture the higher values the CWB gets from Japan, the UK or even from the North American market? This is the key question. Note that there are cash flow options available for farmers, and they are likely to be expanded. Farmers can pick their own price off of Minneapolis through the basis program, in a way that preserves the single desk benefit for all farmers.

[parsley]

Every farmer knows that if he wants to export a load of oats, as long as there is less than 25% wheat or barley in it, he doesn't need a CWB license. That issue has nothing to do whatsoever with what I was referring to and just came out of the blue, Tom.

I asked about the feed mills exporting of 75% wheat/ or barley truckloads full, with an added 25% of oats.. Big companies have been exporting like this for a long time. With NO buyback of course. I did go to the CWB website to see if the Export Manufactured Feed Agreement forms had been changed from the ones I got internally , but they don't seem to be posted at all there.Why doesn't the CWB post them so farmers can get one handy? For all the farmers out there who would like to take a look at one, I see that they are posted on the following website

www.prairiecentre.org

Click on the sign that says Export Manufactured Feed Agreement

There's sure seems to be a lot of money to be had making feed. Ag and Agri-food Canada webpages gives us a few numbers on feed manufacturing in Canada...."The animal feed manufacturing industry in Canada totalled approximately $2.6 billion in sales in 1986..........Feed grains, mainly barley, corn, wheat and oats.....make up about 60% of most feed rations"

That's a lot of truckloads of wheat and barley that the CWB just plain aren't marketing. A lot of farmers would like to know why the CWB isn't marketing this wheat and barley and pooling it. Especially when the the reason the CWB denied pasta growers licenses is because all the durum had to be marketed and pooled by the CWB they said. So, why not market all those truckloads of wheat and barley and put the $$ in the pool, instead issuing no-cost export licenses to the feed mills?

[rodlflaman]

Tom Halpenny - you said
'This creates price premiums over what would otherwise be available. The CWB has the legislative responsibility to capture this benefit for all the farmers in the pool accounts'

Where does the legislation say this. I have read it extensively and have been unable to find such a mandate. The CWB mandate that I have found says that the Boards mandate is 'orderly marketing'. This says nothing about maximizing returns to farmers. In fact when the CWB Act was amended last by bill C-4 the reform party wanted to make changes to the act to make the CWB responsible for maximizing producer returns. This was rejected by the Liberal Government.

In regard to the higher values the CWB gets from Japan etc. Why would intelligent buyers from Japan or anywhere else pay a premium to Canada for an equivalent product that could be purchases from another supplier. If Japan is paying a premium it is for a premium product. I would like to think that it is I the producer who is responsible for growing a premium product and not the CWB. It is therefore I the producer who should be given credit for the premiums recieved from Japanese buyers.

The biggest problem I have with your comments is that where you say this agreement allows the granting of a licence only when the wheat or barley content is less than 25%. Check out the text of the agreement at http://www.prairiecentre.org/intro.htm

Here you will see that any wheat or barley content up to 75% will be given what amounts to an exemption from the buy back procedure. Producers do not qualify for this type of special treatment. Careful what you say Tom. Lots of people watching!

[parsley]

"The export of products manufactured from wheat or barley requires an export license." is the statement you make Tom. The CWB grants all export licenses. Does the wheat and barley that goes through EMFA go through the buyback or does the CWB simply issue no cost export licenses? You work for the CWB and you will know this answer. Clarify it for all of us Tom, for once and for all..
Parsley

[parsley]

I have gone through the statistics that are available, as much as I could. I find that I cannot clearly identify the volume of wheat or barley that is granted no-cost licenses by the CWB via the EMFA. The CWB could easily give us that statistic. They issue the EMFA licenses and they know the exact volumes that pass through this privilege. Could someone from the CWB provide this information? On both wheat and barley.

[bbrindle]

Perhaps these totals should be published every year in the CWB annual report.

[parsley]

The CWB does not market organic wheat or barley I understand. Yet i saw that the CWB had no problem disclosing the volumes and sales of destinations of the private transactions of organic farmers. they posted it on the CWB organic discussion paper on the CWB website. How is it that they can publically post private information with ro regard for the identifiability with such small volumes? Isn't that really out of line, and yet they don't post the millions that go through the EMFA? Isn't there any obligation for privacy with regards to buybacks?
Parsley

[parsley]

Guess I must ask the question again. Maybe someone from the CWB can anwer this.
Isn't there any obligation for privacy with regards to buybacks when the sales are small, and thus identifiable? Does the CWB sell or share private transaction information to outside interests?
Parsley

[parsley]

Here we ask again,
Is the CWB compiling statistics on buyers designated on the EMFA forms, or on the PDS forms?

Perhaps managed by Jane Stewart's Human Resources office....I understand that they are experts in this field. Does the CWB sell or compile private sales information?

I think all Agri-ville readers deserve an answer to these questions.If halpenny could ask someone in the CWB office that would know the answers to these questions, it would be much appreciated.
Parsley

[parsley]

halpenny, have you found any of the EMFA statistics that we asked for so very long ago? Will you please address the privacy issue as well.

Parsley

[TOM4CWB]

Boy, Parsley, it sure is a long way down here!

I wonder, could there be a link between the Feed freight assistance program and this Export agreement and NAFTA.

Maybe under NAFTA feed companies could take the Federal Government to court if they didn't give these no cost export licenses?

[parsley]

The feed companies know that the CWB cannot restrict trade.
Still waiting for answers,
Parsley

[TOM4CWB]

Parsley,

Do you think the North Dakota Durum folks know under NAFTA that business/trade restrictions are illegal, and are signing up Canadian partners so a challenge under NAFTA could clear direct producer access to their plant in North Dakota?

What a good deal, we will get to direct all our value added employment south!

This will really make the "designated area"....

I guess we will just get our sons and daughters to turn out the lights when they leave.