Change for one is change for all

[cakadu]

We have been trying to convince producers for a number of years now to do things with more of a market focus and less of a production or commodity focus. Change to other crops, move towards value-adding, develop value chains and the list goes on (I support all of these by the way.)

It seems to me that with all the current discussion on whether the CWB should go to a dual system or not, it goes to the very heart of whether there should be a shift in the producers. If we want them to change, then shouldn't the systems that stymie growth in these areas also be willing to take a look at change?

How can we expect producers to get into a value-added focus when there are systems in place, like the CWB, that don't allow for more value-adding or at the very least make it unprofitable and unsustainable? How many things like pasta plants etc. do we have to loose before we see that there has to be a shift in the whole system and not just one of the parts i.e. the producer?

[parsley]

Good Morning cakadu,

If you are an Ontario or Quebec MP, you would work towards serving your voters. Voter-farmers in those provinces wanted a vibrant chicken industry near the huge cities they service, and these chicken producers need a huge, guaranteed supply of feed for the chickens.

The same for the milk industry.

Same for hogs

Same for flour mills.


Where could they source a huge, guaranteed supply of cheap grain?

The Canadian Wheat Board is an act of Parliamet controlled by the Federal Government Even today, farmers in the West sit and wait for initial prices to be set by the Government. The Government is always involved with freight too. Think about the huge trainloads of grain shipped East, with subsidized Crow freight.

In the West, we function like colonies And the Western farmers who actually support this system , who want this Wheat Board system no matter the price, are political ideologists.

Pooling is a good tool for farmers, and should be looked at as an opportunity, but compulsory pooling is a political system because force and coercion are incorporated into that very tool.

Listen for the the man shouting, "Compulsory Single Desk ", and you can smell the stench of politics.

Parsley

[cakadu]

Thanks for that parsley. I guess my one big problem with the push against dual marketing is that the CWB proponents and that includes the directors - are all saying that it won't work. How do they know it won't work? What proof have they got that it won't?

It seems to me that they can't use evidence from whenever the wheat board was first envisioned because things were entirely different back then. We can't keep forcing antiquated systems to work in today's marketplace. Some of these things were likely a good idea back when they were first started, but like most things, they have to change and evolve to meet the current realities.

Do I think that everyone will abandon the CWB? - No I don't because there are enough supporters that will continue to use it. Do I think that we should give a marketing choice to people? Yes, because that is the only way we will see if it will work or not. Do I think it will spell the demise of the CWB? I can't answer that at this point because we don't know how anything else will work. The point is that we have to try and we have to move on to things that might work in today's marketplace.

I have asked numerous times - why should the producer do anything differently when they system that he/she has to work in doesn't change either. What's the point in changing if the infrastructure and policies don't change along with the times?

[parsley]

Adam Smith....Would you please repost Mr. Ritter's letter with your comments in capital letters? I don't think this site facilitates italics.
Parsley

[AdamSmith]

Sorry about that parsley
Adam's comments are (in capitals)

Open Letter to western Canadian Farmers

In June, the Standing Committee on Agriculture and Agri-Food released a report called The Future Role of the Government in Agriculture. Among the Committee’s many recommendations, there was one that should be of particular concern to you as a grower of wheat and barley. The members of the Committee recommended “that the board of directors of the Canadian Wheat Board authorize, on a trial basis, a free market for the sale of wheat and barley, and that it report to this Committee on the subject.”

This recommendation has received a lot of media coverage. Some groups have come out in favour of the recommendation. Others, including the farmer-elected board of directors of the CWB, have said that it is wrong and should be withdrawn.

Regardless of where you, as an individual farmer, stand on the issue, there are certain aspects of the debate that need to be clearly outlined:
·The only people who really have a say on this issue are the farmers of Western Canada. The Standing Committee of the House of Commons cannot decide the future of how your wheat and barley is sold.

(THE CWB OBVIOUSLY BELIEVE THAT PARLIAMENTARIANS HAVE NO ROLE TO PLAY WHEN DECIDING PUBLIC POLICY)

·You determine how your wheat and barley will be marketed through the democratic elections that take place throughout Western Canada. CWB elections are being held this fall in Districts 1,3,5,7 and 9 and there are many individuals, representing a wide array of views, who have indicated their desire to stand as candidates.

(DEMOCRATIC ELECTIONS THAT ALLOW THE INCUMBENTS TO USE ALL THE RESOURCES OF THE POOLING ACCOUNTS AND A MULTI-MILLION DOLLAR COMMUNICATIONS BUDGET FOR ELECTIONEERING WHILE THE OPPONENTS ARE LIMITED TO $15,000 PER CANDIDATE. OBVIOUSLY THE CWB IS NOT INTERESTED IN FAIR ELECTIONS THOUGH.)

·No one contests the importance of value-added activities. However, let’s be clear on what value-added means for farmers. Value-added, as the Committee itself defines it in its report, “embraces every means by which farmers can secure a larger share of consumer spending.” In other words, when you maximize the returns that farmers get for their grain, you add value. When you reduce farmer returns – regardless of what you are doing to the grain – it’s not value-added.

(THAT’S WHAT THE COMMITTEE SAID, ... THE CWB IS AN IMPEDIMENT TO VALUE- ADDED)

Farmers don’t have time to waste on empty words that translate into less money in their pockets

(EXACTLY)

For example, the Committee talks about producers in Ontario and Quebec enjoying “increased flexibility in the marketing of their wheat and barley”. With all due respect to the Committee members, increased flexibility is of no benefit whatsoever if farmers are getting less money for their grain.

(BUT THE ONTARIO MILLERS ARE SAYING THE PRICE OF WHEAT HAS GONE UP)

What is happening in Ontario only matters if farmers there are better off financially.

(AND THEY ARE, JUST ASK THEM!)

·On-farm economic activity and processing, which the Committee calls an “emerging factor of great concern”, is enabled under current regulations. Farmers can mill their own grain on-farm for the domestic market without the CWB’s intervention. They can feed it to their livestock or sell it into the local feed market. The Producer Direct Sale process, that the CWB is committed to re-examining in the fall of 2002, allows farmers to capture the benefits of higher-value markets and is being used by organic farmers, in particular, in this manner.

(I DON‘T KNOW OF ONE PERSON WHO AS USED THE BUY-BACK AND NOT CURSED THE THING)

·The CWB does not buy wheat and barley.

(IT CONFISCATES/EXPROPRIATES WHEAT AND BARLEY)

It sells these crops on your behalf.

(WHETHER FARMERS LIKE IT OR NOT)

Farmers ultimately have to decide if they are better off selling their wheat and barley on their own or if they get better prices by selling it together through one agent. Selling through one agent like the CWB does imply discipline that some farmers will never like. But there are reasons why countries establish cartels, workers establish unions and tractor companies merge with the competition: when you are the sole supplier of a commodity, you can extract more from the marketplace.

(BUT THE CWB IS NOT THE SOLE SUPPLIER OF WHEAT AND BARLEY. THE AMERICANS, AUSTRALIANS, SOUTH AMERICANS AND EUROPEANS ALL SELL WHEAT AS WELL. NO MATTER WHAT THE CWB SAYS THEIR WHAT AND OUR WHEAT ARE INTERCHANGEABLE. US DNS AND CWRS ARE NEAR CARBON COPIES, CPS AND CWRW ETC. ARE JUST ANOTHER MID QUALITY WHEAT WITH NO SPECIAL CHARACTERISTICS AT ALL.)

·Anyone who believes that a “free market” - like the one that the Committee is recommending – will be the best of both worlds has not thought the issue through. The value of the CWB is built upon three main factors:

·single-desk selling
·price-pooling
·government guarantees for credit sales and payments to farmers.
Open up the market and make it free so farmers can sell to whomever they want, whenever they want, and you have already eliminated single-desk selling.

(YES , THAT’S THE GENERAL IDEA.)

Next, price-pooling falls by the wayside because the CWB can only attract supplies of wheat and barley by buying your grain from you outright on a cash basis, especially when markets are rising.
(NOT SO KEN, THOSE FARMERS WHO WANT TO MARKET/PRICE THEIR GRAIN THROUGH A POOL WILL SIGN A CONTRACT WITH THE CWB WHICH WILL COMMIT THEM TO DELIVERING THEIR CROP TO THE CWB’S VOLUNTARY POOL. THE CWB WOULD BE IN THE BUSINESS OF PROVIDING THE SERVICE OF VOLUNTARY POOLING, PERIOD.)

Lastly, the government guarantees disappear as grain companies competing with the CWB demand equal treatment.

(GOVERNMENT GUARANTEES ARE DOOMED ANYWAY)

What remains is something very different than what Prairie farmers know today as the CWB.

(YES, AND THAT’S THE POINT KEN, THE CWB WILL EXIST AS SOMETHING THAT IS OF VALUE TO SOME WITHOUT COMPELLING ALL TO PARTICIPATE)

Therefore, an open market does not mean today’s CWB operating side-by-side with the private grain trade. It means the private grain trade and perhaps something that used to be the CWB.

(RIGHT AGAIN, KEN.)

Farmers have a choice to make. They can have today’s system with the CWB acting as their selling agent. Or they can have an open market system. But they must be aware that an open market will completely transform the CWB.

(IT’S THE ONLY THING THAT WILL.)

·Having a trial period for this free market is not a workable option.

(FOR WHO KEN? THE CWB OR FARMERS.)


The purpose of a trial period would be to assess the CWB’s performance in an open or free market environment. But in a free or open market, you no longer have the CWB

(THIS IS PURE FEAR MONGERING, NOTHING MORE, NOTHING LESS.)

because you no longer have the things that make the CWB work.

(LIKE COERCION, FEAR OF RETRIBUTION, ZERO ALTERNATIVES, FEAR MONGERING, AN UNLIMITED USE OF FARMERS MONEY WITHOUT REGARD FOR IT’S ETHICAL AND RESPONSIBLE USE, THINGS LIKE THAT KEN?)

As outlined in the preceding paragraph, you would be evaluating something that used to be the CWB. It would no longer have single-desk selling powers and it would no longer be able to pool farmer returns. This proposed trial period, therefore, would tell you absolutely nothing about what the CWB does or doesn’t accomplish for you today, in its present form.

(KEN IT’S THE ONLY THING THAT WILL, JUST BECAUSE THE CWB TELLS US IT’S GREAT DOESN’T MAKE IT SO. WE KNOW TODAY THAT WE’RE MAKING ABOUT A DOLLAR PER BUSHEL LESS THAN OUR AMERICAN COUSINS, DOMESTIC FEED BARLEY IS WORTH MORE THAN MALT BARLEY, DOMESTIC FEED WHEAT HAS AN EQUIVALENT VALUE AS MILLING WHEAT, WE KNOW OUR INDUSTRY IS IN TATTERS BECAUSE OF THE CWB HANDCUFFS, WE KNOW TODAY THAT FARMERS HAVE TO WAIT IN THE QUEUE TO DELIVER WHEAT, WE KNOW TODAY THAT THE CWB SPENDS MORE TIME AND MORE POOL ACCOUNT MONEY ON COMMUNICATIONS THAN THEY DO ON MARKETING. THE TRIAL PERIOD WILL ALLOW FARMERS TO SEE IF THOSE THINGS WILL BE DIFFERENT UNDER A FREE MARKET SYSTEM.)

As you think about where you stand and what you believe is best for your farm, please make sure to gather the facts that you need.

(ARE YOU GOING TO ALLOW THE OTHER SIDE EQUAL OPPORTUNITY TO STATE THEIR POSITION. I MEAN WILL YOU SEND OUT A LETTER EXPLAINING THE OTHER SIDE, USING THE CWB LIST AND AT CWB EXPENSE KEN?)

The CWB belongs to you and the other farmers across Western Canada.

(NOT REALLY, IT BELONGS TO THE FEDERAL GOVERNMENT, IT’S CALLED THE CWB ACT, REMEMBER.)

Together, we owe it to ourselves to carefully consider its future. You can also phone our Business Centre at 1-800-275-4292 or you can speak to your local Director or CWB Farm Business Representative.

Although this year’s crop has presented farmers with many hardships and challenges, I wish all of you the best possible harvest.

(THANKS FOR THE CONCERN KEN)

Ken Ritter
Chair of the CWB Board of Directors

[parsley]

Mr. Ritter states:

" The CWB does not buy wheat and barley. "

This is simply not true. There is a legal change of ownership of the grain once it is offerred to the Board. A legal change of ownership is one of the characteristics of selling. Farmers no longer own their grain once it is offerred to the Board, and that is quite obvious when one examines the buyback. Farmers have to buy their grain back to reassume ownership. If Mr. Ritter's statement was true, there would be no need to buy your own property back. Unfortunately, there is a change of ownership. And the Chairman of the Canadian Wheat Board knows full well there is a change of ownership.

Once again, the CWB is not providing correct/truthful information to farmers. Why would he say this?

Interesting comments Adam Smith. Ones to mull.
Parsley

[parsley]

Cakadu,
You ask the question,

" why should the producer do anything differently when they system that he/she has to work in doesn't change either?" and it's a very revealing question.

The point I was trying to make is that producers in the West are really pushing for change. Pushing hard. The farmers in the West, in retropspect, realize that the only way they have made any money at all is to increase yield, and they have done that decade after decade, but the yields factor alone are no longer able to capture the margin the farmers need. So they are looking for higher prices.

We all know that the CWB is not able to put more money in farmers' pockets. It's just not there. So we look at specialized markets, or value-add etc. to pay bills.

What we want to do will pump money into the West. Right now, the West probably grows $4 Billion wheat/barley/yr. A lot of pocket-change! We want to keep a bigger piece of that pie. If we do, those millers in the East will have to pay more. And they won't like it. Those chicken farms near Toronto will have to pay more. Those Dairy guys in Quebec will have higher priced feed.

The system will have to change, but it will only change if Westerners make it happen. Every farmer has a responsibility to corner a politician and grind for change. Every consultant in the Ag industry, every specialist, every entrepreuneur, every Government department has to want to effect change.

Farmers have to lead the charge. We are on the precipice of making that happen and it is exciting and filled with potential and filled with promise.

We just have to "press delete" to the political voices that want to continue with the status quo that works against the West.

Do just what you're doing, cakadu, don't swallow every CWB "fact" hook, line and sinker. Not ever again.

Parsley

[parsley]

Lets not fill out a CWB permit book this crop year. If we don't apply for a permit book I wonder what the CWB would sell. Feed grade milling wheat might go for a high price along with feed grade malt barley particular when supply is going to be very low. Don't need a permit book for these grades of grain.

The amount of wheat we have been growing in Western Canada the the last few years has been getting smaller and smaller. At the rate we are going the CWB won't have anything to sell in a couple of years anyway. Wonder what they will pay the help with.

[TOM4CWB]

Kernel;

I was thinking the same myself, but what about the silly CWB election???

Permit Books = votes... do we vote?

Hasn't the CWB already spent way over any election limit already in its own self promotion communist campaign???


Wouldn't the Alberta government be justified in running a choice marketing referendum, at the same time as the CWB director elections, therefore the CWB and Goodale couldn't tell for which campaign the promotion was being spent on??

The AB Gov. could simplify the voting elegibility qualifications, and we could kill two birds with one stone???

Wouldn't the CWB deserve this?

[chaffmeister]

Perhaps this is a little off topic, but it does relate to CWB "performance".

In 2000/01 CWB administrative expenses were a little over $66 million on about 20.4 million tonnes of grain receipts. Works out to about $3.26 per tonne. This does not include additional operating expenses such as storage, interenst, demurrage/despatch, etc - it's just plain overhead. $66 million!!

And the trend in these administrative expenses is not pretty (all in millions):
94/95 $39.6 ($1.80 per tonne)
95/96 $41.4 ($1.87 per tonne)
96/97 $46.4 ($1.63 per tonne)
97/98 $52.9 ($2.44 per tonne)
98/99 $55.2 ($2.81 per tonne)
99/00 $63.8 ($2.70 per tonne)
00/01 $66.4 ($3.26 per tonne)

Since 94/95, CWB administrative costs have risen by 68% in real terms and 81% on a per tonne basis.

It's facinating to me how the CWB (thalpenny, for example) can argue how all the savings the CWB "captures" in freight, etc goes right back to the farmer through the pools and adds that the grain companies could never be trusted to do the same. (They don't seem to realize just how competitive the grain business is.) At no time does the CWB say how great a job they are doing on keeping expenses in line; it's no wonder. By the way, these expenses go right back to every farmer in the pool; on the other hand, if a grain company increases it's overhead, it comes right out of it's own margins, not those of it's customers.

If the upcoming crop is a bad as everyone says it is and the CWB "program" gets even smaller, what do you think will happen to these administrative expenses?

What do you think has happened at SWP and Agricore and Cargill in the same time frame?

Everyone in Western Canada is tightening their belts getting ready for the bad news - believe me. Grain companies, railroads, input companies, truckers - they're all getting ready for less grain and less money. Even a friend of mine in the hotel business says they're bracing for the worst. Shouldn't someone be asking the CWB what it's doing?

Why is this relevant in a thread about Ritter's letter? To me, it's one more aspect of the CWB that needs to be clear in everyone's mind when considering the benefits of choice.