AdamSmith agrees 100% with Ken Ritter

[sawfly]

if we are going back to square one. re grain co.s and board. you must also open up rail access to anyone. or regulate no discrimination against single car shippers.
its a bit of a dream thinking you can deregulate this industry into prosperity. While market signals and inovation are great, the bottom line is our competition has deep govt. pockets backing them up.

[wedino]

Sawfly, I disagree with your statement "but grain companies haven't been swimming in profits". Look at WIT (Weyburn Inland Terminal)financial statements, they've done excessively well handling grain.(mostly cwb grain)

I agree, rail access has to be opened up.

[AdamSmith]

I guess it all depends where you live in the prairies but in my mind value added industries, trucks and competition for the land are the biggest competitive factors for the railways and in that order.

Whether we like it or not the RR companies do own the railbeds, the tracks etc. These aren't public roads they are in reality private property.
No matter what kind of agreement, short of expropriation, we come up with, the RR companies still have the power to dictate the terms in which open access could happen. It's their property and I do believe in the concept of property rights.

My attitude has been, that I can't afford to push grain over those damn mountains. Grow more of what stays within the province or region. I just love seeing those hog operations here in MB. I don't think any of my barley has left the province in the last five years. Feed wheat is the same.

Open access is just an ANNOYANCE to the RR companies, value added is a THREAT. There is a huge difference.

The CWB talks the talk of value added but they don't walk the walk. Parsely is absolutly right the CWB, the Grain co's and the RR's all need each other to keep doing what they've been doing. The grain co's get handling revenue the RR's get the freight business and the CWB gets to keep it's power.

None of those entities, Grain co's, RR's or CWB want to see Brewing Co.s buying direct from farmers or ethonol plants buying direct or any one else for that matter.

We as farmers DON'T need to be owners in these value added companies BUT WE DO NEED them to be here and to be able to buy direct from us.

Open Access keeps farmers from looking at the real solution and the CWB is right there, in like a dirty shirt, making sure farmers keep looking the wrong way.

[chaffmeister]

One thing at a time (sorry for the length):

AdamSmith - The reason we talk about a dual market is because the anti-CWB faction lost the federal plebiscite on barley marketing in 1997. The question in the plebiscite was whether you wanted to see the CWB totally absent from the barley market – or not; no middle ground. 62% voted to keep things the way they are. More importantly, only 38% voted to punt the CWB.

It was all in the question. The year before, 66% of Alberta farmers said they could support an open market, even if the CWB was part of it – as an option. And we know through leaks that the CWB itself has commissioned surveys covering the whole Designated Area that agree with the Alberta vote.

So to satisfy 2/3rds of the farmers out there (or more), you promote a concept that’ll get you there. Bingo – you have the roots of the “dual market”- where you could deal without the CWB (as you want to) and you could sell to the CWB (as others want to). You would have a choice. The plebiscites of the 90’s showed that’s what would get support.

So the term, the approach, and so on, wasn’t to mollify the CWB, it was aimed at getting more farmer supporters. It’s just marketing. As a floor trader I know used to say “forget the steak, you gotta sell the sizzle”.

I would hazard a guess that if the open market supporters had drawn a line in the sand and pushed to simply close down the CWB completely, the debate would never have gotten this far. If there was no middle ground, no compromise, the rigid CWB detractors out there would be considered an unimportant extremist fringe group. I’m sure even the Conservatives would have had a different plank in their platform.

Adam – You may be right - the CWB may be irrelevant. It certainly hasn't proved its worth to me. You make a lot of good points; I particularly appreciate, “should the CWB be artificially propped up when there may be zero rational need for it once we adopt an open market?” To me the answer is a clear and emphatic, no. I would hope no one is talking about that.

The road to get where you know you need to be isn’t always a straight line. I learned long ago, progress is best made through evolution, not revolution. (I know this won’t make Parsley happy, but it is what it is.)

As for the CWB’s stance that an open market (sorry – dual market; to me it’s really the same thing) is the demise of all that we hold near and dear – knowing what I know about the CWB culture, I would expect no less. I for one am confident that the majority of those out there that really matter – farmers – will get tired of the CWB's rhetoric as we get to know more and more about what the CWB does (and doesn’t do) for them, the market, and the Western Canadian economy.

If there’s a role for the CWB in an open market, it’ll find it. If not, it’ll be dust in the wind. Markets are funny that way – they have an uncanny ability to employ the correct resources if allowed to (freely). But then a guy with the name Adam Smith knows that already, right?

So, for me there are a few immutable truths when it comes to the CWB debate:
1. A dual market IS an open market, as long as there are no restrictions, no limits, no quotas, and no forced compliance.
2. Both market concepts engender choice; if the CWB is a player in either, that gives you one more choice.
3. Most people can embrace choice – it’s just so damned democratic.
4. Few people like to be told what to do. It’s a freedom thing. This applies to both sides of this debate.
5. What Ken Ritter says is a lot less important than what farmers say.

[AdamSmith]

Here's another point on value added.

I just come in from loading a B- train with barley. It was going to a MB colony. But I didn't sell direct to the colony, I did involve a grain company. But not a multi-national or even a big Canadian one. I sold through a small MB company called Delmar Commodities. I've sold probably 80% of my feed grains to them in the last five years. The grain never sees an elevator it always goes direct to the end user. Their cut is small compared to the main line companies probably in the 5 to 10 cent range. But I know I'm going to get paid and paid pmomptly and I have good confidence that my weights are true. So I happy giving Delmar a dime but we can't afford to give any company 50 cents for what others can do for a dime.

It's a win-win -win for the three entities involed in the transaction.

Knowing you are going to get paid, fair and prompt is key.

But I would have no trouble dealing with say Anheuser-Busch directly. I think that would be great.

[chaffmeister]

Parsley:

1. In the event the CWB was closed down, the multinationals would not have to hire staff to source grain for them. This is one of the problems with the whole CWB system – it’s almost totally redundant. The Graincos already have staff “sourcing” grain – even CWB grain. The CWB has area representatives almost doing the same thing. The CWB has about 100 people in its transportation department – doing exactly the same thing as their counterparts in the Graincos. And much of the CWB grain exported from Canada is actually sold by Accredited Exporters (Graincos) – now talk about redundant!

2. You say farmers pay for sourcing now. Yes that’s right – CWB, no-CWB or non-CWB, you’re paying for grain handling (sourcing). As long as these guys provide you with a service you can use, it’s not a bad thing. As soon as you can do it cheaper, better, faster, without them, they should be dust in the wind.

[parsley]

Perhaps you are right about hiring staff, chaffmeister.

I had always presumed that the accredited agencies filling out the permit books, would pencil in a fee, and the CWB(farmers) would pay for that service.

The big advantage to the corps is the access to the information staring at them.

Amounts in every bin, etc. at their fingertips. And taking to farmers about seeding plans, etc while filling out the permit books. All charged to the farmers.

The Corps now need few staff to source what they need or to buy from the Board.
BUT
What if CWB disappears?
1.No more permit books.
2. Info not available.

Or what if open market?
1.Some permit books not available.
2. Some info not available

In either scenario, I presumed corps would hire extra staff.

No Board staff but a few extra Corps staff equals savings for farmers, is what I penciled out.
Parsley