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Will the CWB Ever Stop Pillaging Organics?

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    Will the CWB Ever Stop Pillaging Organics?

    Look at the year...


    QUOTE

    norganic wheat board

    By avoiding the Canadian Wheat Board and selling their own organic
    wheat, Western grain farmers could earn more, while taxpayers saved millions

    Carol Husband
    Financial Post

    Thursday, March 04, 2004
    ADVERTISEMENT

    Kirk and Ila Torkelson farm organically at Beaubier, Saskatchewan, and like all businesses, it's challenging. In Nov. 2002, two truckloads of Torkelson's wheat headed south for the American organic market.

    He needed the sale.

    If Torkelson lived in Ontario, he would have been granted the required Canadian Wheat Board (CWB) export license, but CWB policy denies licences to Western farmers. CWB policymakers use their licensing division to funnel grain into the CWB's Marketing Division, where it is pooled.

    For Torkelson to legally cross customs, he needed to sell both loads of his wheat to the CWB and then, be damned, buy back the same two loads of
    his own wheat from the CWB, coughing up a tidy $1,430 payout to it in
    the process.

    The CWB legislation, itself, doesn't specify this buyback requirement
    for getting a permit, but the CWB bureaucrats do.

    By having to sell his grain to the CWB, Torkelson was automatically plunked into the conventional CWB system, one which eats up Western organic farmers' profits, gives them a price based on a formula meaningless to organic farmers, and prevents them from competing with their Eastern
    counterparts on a level playing field.

    Out West, organic farmers want to be added to the CWB's privileged licensing list, which includes Eastern growers, kamut wheat growers, big
    corporate feed mills, seed growers and others.

    Each is automatically granted export licences, each bypasses CWB marketing and pooling, each downloads its licensing costs on the West and each puts the cash in its own pocket.

    Adding organics to the privileged list is logical because the CWB can't even market organic grain since global organic markets require the CWB seller to be certified organic, which it is not.

    The CWB was so confident in its selling ability during the 2002 bullish grain market that it actually predicted, in writing, that the CWB's
    payment system should get Torkelson what amounted to a preliminary $8,900 payment at the end of the crop year.

    The CWB's communication's
    machine -- a $2-million farmer-funded operation -- was in full gear in every media outlet and farmers were inundated with the likes of CWB
    analyst Peter Watt, boasting, "... the wheat board is in the driver's seat in terms of where we market the grain, when we market the grain and what price level we market the grain."

    Prices were high and grain seemed scarce as CWB elections appeared on a
    sunny horizon.

    But the CWB pulled out of the hot market.

    It should have spent more time marketing and less time going to Liberal fundraisers with tickets paid for by farmers, because the market dived and the board ended up selling into a falling market and swallowing a huge deficit, but not before it took a bite out of Torkelson.

    Thirteen months after his buyback, Torkelson received a second dun, or
    demand for money, from the CWB for $4,630, increasing his buyback cost
    to $6,060, or 30% of the gross income from his sale, with the only service being rendered was to issue an export licence.

    When his plight became public, the CWB claimed it was Torkelson's own
    fault.

    The CWB's organic marketing specialist (who doesn't market organic grain nor do organic farmers want him to), went after Torkelson in the Western Producer newspaper saying: "It appears that he wasn't following the pool return outlook and he wasn't keeping abreast of what the market was doing. If he had done that, he would have been more aware."

    There was absolutely nothing Torkelson could have done. He had done business according to the CWB's terms.

    The CWB's actions highlight the pitfalls of dealing with this government agency.

    First, you can't trust the CWB's figures and projections to determine whether the buyback is affordable -- the second dun proved just how bogus the CWB's own figures can be. Second, although CWB experts stopped selling during a bullish market and although CWB profits turned so sour that the CWB ended up begging the federal government for $85-million of taxpayer's money, Torkelson -- the managing expert on his farm -- knew enough to sell into his niche organic market when prices were high; third, it reflects the CWB's attempt to download the blame for their lacklustre selling on to the backs of farmers who are critical.

    Torkelson wasn't alone in suffering at the CWB's hands.

    Organic producer Cyril Stott of Brandon, for example, calculated that he lost $13,500 from his 2002 crop in the bottomless-buyback-hole.

    These kinds of losses happen all the time in organics, but you don't hear about them.

    No less important, but often overlooked, are the organic sales that are actually lost.

    Dwayne McGregor farms in Chaplan Sask., and he blames the CWB's high buyback as a contributing factor behind his lost sale to Japan.

    Arnold Schmidt near Maple Creek lost his sale to the U.S. because
    of the CWB.

    Even though organic buybacks are gouging profits, strangling Prairie
    sales and stopping contracting, the CWB continues to withhold licences.

    Eastern Canadians and other countries then seize the Western farmers'
    lost economic opportunities.

    Most CWB directors refuse to acknowledge the disadvantage that Western organics face.

    The truth is clear to others, including the Western Barley Growers, the Canadian Chamber of Commerce, the Standing Committee of Agriculture and Agri-food, Agri-core United and the Grain Growers of Canada.

    All have adopted policies supporting marketing choice for farmers.

    The Alberta government is also firm in its stance for equal marketing choice opportunities. Economic hurt is embodied in Western alienation, and until each Westerner has the same economic opportunities that Easterners enjoy, resentment will grow.

    Is there a solution? Yes.

    Organic farmers have provided the CWB with an instant, no-cost solution. The CWB could simply grant export licences to Western organic farmers, the same as it already does for Eastern farmers
    and others.

    No changes in the legislation are required.

    Carol Husband is an organic farmer in Wawota, Sask., and a member of
    Organic Special Products Group, a voluntary, self-funded association of
    organic grain producers that advocates marketing choice for farmers. © National Post 2004


    UNQUOTE

    Parsley

    #2
    It is sure nice to know that the Wheat Board will be handing out pink slips to all it's barley marketers at the end of the 07 crop year.Just a little bit of inside knowledge.

    Comment


      #3
      Thursday, October 26, 2006
      House of Commons
      CANADA

      Standing Committee on Agriculture and Agri- Food

      AGRI NUMBER 023 1st SESSION 39th PARLIAMENT

      EVIDENCE

      Thursday, October 26, 2006


      Mr. Boyd Charles (Organic Farmer, As an Individual): No, I'm
      just here to represent myself. I'm Boyd Charles, not Charles Boyd. I was asked to appear as a producer of organic grain. I farm in Saskatchewan.

      We farm 10,000 acres of certified organic ground, and have had a lot to do with the Wheat Board. The main reason I wanted to come was to tell you how the Wheat Board affects at least an individual organic producer in selling his grain.

      I quit traditional farming in 1999, and one of the main reasons was
      to sell my own grain and not have to market it through the Wheat Board.

      I found out over the last seven or eight years that I actually have more to do with the Wheat Board than I did before.

      Not one bushel of organic grain that I've sold since 1999 has actually been traded in Canada, except one sale of feed grain to a local organic chicken place near Winnipeg.

      So all my grain has been
      shipped to Europe, the United States, or Japan. I buy back every bushel from the Canadian Wheat Board, and I'm here to talk about this ridiculous buy-back feature that organic farmers have to go through.

      For example, I bought back 462 tonnes of feed wheat in February—around 15,000 bushels—to ship to a place in the United States.

      The contract I signed was for a buy-back of $6.92 a tonne.I don't get the final results until the end of the crop year, so I just got a bill in the mail the other day for $11,000. That is a little over three times what the initial contract said.

      I don't know anybody who can run a business if you don't have any control over the costs. I can tell stories all day on the buy-backs, but that's just one example.

      I just grew a malt variety for an organic maltster in Missouri under
      contract.

      It was accepted, and I'm ready to ship 50,000 bushels of malt barley to this organic maltster in Missouri. The trucks are hired,the contract's been signed, and the only thing left to do is buy back the malt barley from the Canadian Wheat Board.

      I phoned down for a buy-back and I couldn't believe it. The buy- back on malt barley that day was $2.65 a bushel. That meant I would have had to stroke a cheque to the Canadian Wheat Board for in the neighbourhood of $140,000 if I had bought back my malt barley that day.

      They said, “Well, you have to figure in the pros”. When I asked
      what they were she said, “It will get you back down to $56 a tonne”.

      So it will only cost me $1.20 a bushel to sell my own barley to a maltster in the United States, after I found the market for it and did
      everything.

      What disgusts me so much is that they couldn't even buy the grain if I offered it to them. I can't take it near any of their facilities or it
      would be contaminated. Organic grain has to be shipped in a certified vessel. So even if I offered them the grain they couldn't buy it, at least in the experiences I've had with them.

      Anyway, it wouldn't be at the price you'd want to sell it.

      This buy-back on barley for $140,000, that's just an estimate. I might get a shock, because you have to run the full crop, which doesn't end until July 31 of next year, and then I'll get a bill in the mail in about October or November with the actual cost of that buy- back.

      If it's three times what they said it was in my feed week, then it could be as high as $400,000. I mean, you have no idea of what you're doing.

      The only thing I can suggest it resembles is if it was the 1920s in
      Chicago, and I ran a little corner store, and I had to pay protection
      money to the mafia in order to operate that little store. I'm a farmer in
      Saskatchewan, and in order to operate that farm of mine I have to pay protection money—or whatever you want to call it—to the Wheat Board so I can operate.

      I can't deal without them. This is the
      only example I can come up with.

      They have nothing to do with selling my grain. They have nothing to do with transporting my grain. They didn't find the buyer. I have all the expenses of growing it, yet I have to turn over a dollar a bushel to them just for the privilege of their buying my grain and then selling it back to me. If you tell this to an American, he has a really hard time grasping that idea.

      That's the first point I'd like to make.

      If you do nothing else, please get the organic farmers out of the picture. I don't know of one organic farmer who wants to be involved in buy-backs or dealing with the Wheat Board.

      At least in my case, I'd like to market my own grain. Right now I'm making a deal for flax to Poland, I'm selling a special wheat to Japan, and I'm selling malt barley to the United
      States—and I don't need any help.

      I just want somebody to get rid of
      the red tape, especially the buy-backs.

      The other thing I would like to comment on is the vote we were
      talking about having to decide this matter.

      I don't know any business that's running that doesn't have an equal vote. I was talking to a fellow on the plane who worked for Shoppers Drug Mart. He just got bought out last year. The company that bought him out bought 52% of the shares. So they controlled Shoppers Drug Mart, because they owned 52% of the shares. They made them lean and clean, and made
      their money. They sold all their shares, made lots of money, and now
      they're back to 3%, so they don't have a whole lot to say in Shoppers
      Drug Mart any more. But at least when they owned 52%, they had a lot to say about Shoppers Drug Mart.

      Some 50% of the producers in the Canadian Wheat Board don't market enough grain to matter, yet they have exactly the same amount of say as the person who farms 10,000 acres.

      My suggestion would be that if you're going to have a vote that matters in the real world, then have one acre equal one share. Therefore, the guy with 10,000 acres and all that money invested in machinery and land
      would at least have a little more to say than the guy who has his
      name on a permit book but has never sold a bushel.

      You have to come up with some kind of decision on who gets to vote, because
      38% of the people have never marketed a bushel, and 50%—if you combine them all—marketed 1,200 bushels or something.

      It's ridiculous that people who don't have anything invested in a company would have that much power.
      That's my look at it.

      Thank you.


      Note from Parsley:

      An NFU Member stood up at the back of the room and said he was one organic farmer who wanted to sell through the Board. I think the CWB and he deserve each other.

      Parsley

      Comment


        #4
        Parsley, Since you so forcefully argue that Organic is just another special crop more or less, what are you prepared to do about the poor marketing performance in some of the special crops sector?

        Marlene Boersch (check spelling)made a presentation at Pulse Days in January in Saskatoon detailing problems in the large green lentil market. Her research showed that Canadian exporters were undeselling the going price up to $400 per tonne in some cases. The reason why this was happening according to Boersch was that processors and traders were more worried about putting product through their plants than they were about what the end price farmers were getting.
        Since you are so concerned about the performence of the Wheat Board I was wondering if you are concerned about the private grain trade and obvious failure of the grain trade to do a good and consistent job on pulse crops.

        I suspect that the margins in the organic market are often very large for the traders because there is no open and public price discovery and many farmers do not do a good job of researching the market and many are stuck selling into depressed markets to generate cash flow.

        Since you are so adamant that farmers should have access to information about how the CWB operates why are you not asking for the private trade to open up their books so farmers can see what is going on.

        What are your ideas for fixing these kind of problems? Because if you are really concerned about the welfare of farmers you should be working on these issues as well. Surely the Wheat Board is not the only problem in ag. marketing.

        Comment


          #5
          With Permission from Mr. Dagenais:
          QUOTE:

          Original Message -------- Subject: Canadian Wheat Board
          Charges
          Date: Sat, 07 Oct 2006 21:20:52 -0600
          From: The Dagenais <c.dagenais@sasktel.net>
          To: Ritz.G@parl.gc.ca, dayton.funk@sasktel.net, Saskatchewan
          Rivers <saskrivers@sasktel.net>

          Dear Mr. Ritz:
          Today due to the continuing rain,I have time to send you this note along
          with a copy of a bill which I received from the CWB this week.

          Earlier this summer I sold 2 rail cars of organic feed barley to a U.S.
          buyer.

          Of course I had to apply to the CWB for an export permit. (which
          idiots put a farmer controled grain marketing company in charge of
          issueing export permits?

          I jest about the farmer controled part !!!) And I had to buy my own grain back from a company that I never agreed to sell it to in the first place, but I think you know how that story goes so I'll just let you look at the attachment to see just how STUPID this story gets. I was told at the time of sale that I could expect to pay something in the order of $0.39 per bushel IF the PRO at that time was
          accurate.

          I objected vehimently and told the lady at the CWB that they were doing nothing for me etc. and that I didn't want to use the services of the CWB . Of course she said "Thats the law, all exportsales of wheat and barley have to go through the CWB and no export
          permit without going through the CWB.


          Now the ugly part, I get this bill,I'm sure you can do the math but here
          it is anyway in case you decide to foreward this on to someone who
          doesn't know how.

          The net weight of 81.760 tonnes (contents of 1 rail car) is equal to
          3755 bushels. Total cost of getting ****D by CWB $4241.96

          Net cost of my donation to the CWB pool account $1.13 per bushel .How
          much I sold that barley for is my and my buyers business, but I can tell
          you that loosing $1.13 off my end of it just turned a profit into a
          loss. This is HUGE. I don't owe this to all the conventional farmers who
          sold barley through the CWB.

          I have another bill similar for the othercar only it does not have a $30.00 charge for the FREE export permit.

          They call it an Admin. fee. I call it $30.00. NOT FREE!!

          Please use this to the best of your abilities to persuade as many people
          as you can that this is WRONG. I ask you PLEASE for at least the OPTION
          to NOT use the CWB.


          I understand that some people still want to use the CWB. If this was a free country , we could each market our grain in the fashion that best suits us.

          I would be pleased to talk to you about this matter and would gladly
          appear before any committee prepared to hear opinions from actual producers, not just the hobby lobbiers.
          Sincerely

          Gerald H. Dagenais
          Lazy Diamond Farms Ltd.
          UNQUOTE

          Comment


            #6
            chuckchuck,

            Does Marlene Boersch share an office with Gordon Machej?

            Comment


              #7
              Parsley, I asked an honest question about problems in the private trade and you are avoiding answering. Do you think it is okay what happened in the lentil market? Perhaps you think that all analysts commentators who support marketing boards are suspect?? Does that include supply managed Boards like dairy. Perhaps Chuck Strahl's support for the dairy board indicates he has left leaning tendencies??

              Comment


                #8
                Actually chuckChuck it looks more like you who are trying to avoid the questions that parsley is asking about organics and the CWB. It is you who are trying to change the subject to anything other than the very real problem of the CWB which is what parsley wants to talk about here.

                That doesn't sound like someone who is interested in having an 'honest' conversation.

                Comment


                  #9
                  Two age-old adages come to mind reading this thread:

                  1....Stick to your knitting.
                  2....When chasing a field full of rabbits, the fox picks one.

                  These mean that we are best served by paying attention to what we know and stay focused on what we do. In other words, unless Parsley is a lentil grower, why would you expect him to get involved in trying to solve those issues? We don't here Marlene Boersch talking about the problems with organics, do we?

                  But since you're asking an honest question about the pulse market, I'll wade in - with some questions. Since Marlene apparently identified a problem, what's her solution? (I heard it was to establish a marketing agency for lentils.) And what's in it for her? If there's so much money on the table, why doesn't she step up and pick some of it up? (Maybe that's what she's thinking....She's got the trading background.) If there's as much as $400/tonne involved, that's a lot of incentive to get involved. (Isn't also interesting that we just believe her without any confirmation?)

                  But back to the topic of the thread - how does fixing the lentil problem do anything for the organic / CWB problem? It appears you're guilty of the same transgression you accuse of Parsley - avoiding the topic by deflecting into another issue.

                  Pick a rabbit, Chuck.

                  (Or are you one of the rabbits and you're trying to get the fox to chase another?)

                  Comment


                    #10
                    Chaff, there is no discussion with Parsley on the issue the CWB and Organic. Basicaly its' her way or the highway, if you haven't already noticed.

                    What I want to point out is that many of the critics of the CWB are single mindedly obsessed with the problems real or not at the CWB but have little to say when there are problems with the "free market" marketing system. What this indicates to me is their thinking is selective and highly political. When people such as Parsley and perhaps yourself act as they have all the answers and refuse to have an open and fair discussion it indicates a very narrow view of the world.

                    Comment

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