Western Grain Marketing Panel Report

[TOM4CWB]

Incognito/Chaffmiester;

NOW is the best time to implement the WGMP report. It was done with consensus, by Ralph Goodale himself, and no-one can pretend that the WGMP determinations and solutions for change are biased.

OUR template for needed change is crystal clear... no more study is required!

Can we agree on this point?

[chaffmeister]

If I recall correctly, there were those that accused the WGMP as being biased. The usual suspects – the NFA, Sask Ag Minister Upshall, the CWB itself, and so on. Also, if I remember right, the Feds accepted all the WGMP recommendations EXCEPT the bit about an open market on feed barley (they suggested keeping malt under the CWB – a big mistake, in my humble opinion) and an open market on unlicensed wheat varieties. (Even the CGC was against this one.) And wasn’t there a plebiscite on barley as a follow-up to the WGMP report – one in which most farmers voted to keep barley under the CWB (the wording of the question notwithstanding).

So Tom, be careful what you ask for….should we really conjure up this old ghost? Perhaps it would be best to simply go with the fact that the CWB has not proven itself as an asset to Western Canadian farmers. I can’t believe that the CWB would keep its support among western Canadian farmers if they knew, I mean REALLY knew, what the CWB system costs them each year. If y’all end up going with a plebiscite, suggest some good old fashion head scratchin’ ahead of time. Things you might want to consider:

- The impact of the CWB system on non-CWB crops. You read right. There’s a reason why the canola basis is so terribly weak in the fall – the need for cash. And CWB grains can’t help. So you end up selling canola into a hole at harvest to pay your wheat input bills. Also, in spite of poor outlooks, other non-CWB crops like peas, flax and canary seed keep getting seeded. That’s because they generate cash, even with low prices. So I’ve been told. If only a million tonnes of canola were sold at $20/tonne higher prices, that’s $20 million more for farmers. But we all can see the number would actually be a lot bigger than that.

- The CWB marketing system is based on getting average prices and selling when the buyers are buying. So when the CWB sees a great rally going, does it sell into it? Nope; ‘cuz the buyers aren’t buying. Does the CWB sell futures instead? Who knows?

- How much does the CWB cost farmers by NOT selling grain?

- Does the CWB really get premiums? Why do the academics from U of S say it does but the buyers say it doesn’t?

- The US says the CWB distorts markets. But the CWB has said that its market power actually raises US wheat prices (see the CWB’s Benchmarking Methodology by Dr. Gray at U of S or the Sparks analysis). If the CWB’s actions were successful in raising US prices, why would the Americans be complaining about the CWB? Could it be that the market “distortion” referred to is actually the CWB selling cheaper wheat?

- Why is it that the big milling companies really like the CWB? Perhaps because they can buy up large quantities of wheat (the CWB likes big sales) without making a ripple in the market? In an open market, those ripples spell higher prices (to producers).

- Cost of mistakes and mis-steps. If a grain company misses loading a vessel on time, it pays demurrage. If the CWB is late loading a vessel, you (farmers) pay demurrage. If a grain company finds it has grain out of position (or is simply short), it’ll pay higher prices to farmers to originate the needed grain in the appropriate locations. If it’s the CWB that has grain out of position, it pays huge prices to ship grain from say, Churchill or Montreal to Vancouver – and you pay the price. CWB supporters will say that the private companies will simply get it back with weaker basis levels, or something akin to it. Pretty tough to do that (have a lower bid price) and still compete in a competitive market.

- I’m pretty certain that a grain company would not load #1 red against a sale of #3 red. They wouldn’t take that kind of hit. Of course the CWB may do it – but I’m not sure why (perhaps because they got too much of the #1 red in port by mistake and nobody can really do an audit trail anyway to track down the lost revenue – you know, buying 1-red and selling it as a 3). (Actually the Auditor General probably did, but it didn’t matter because that kind of thing wasn’t what the AG was looking for anyway.)

- Has anyone ever comprehensively assessed the positive impact of having a processing facility operating in a rural community? Probably – I just haven’t seen or read it. It probably tells all the good stuff about a larger tax base for the county or RM, increased off-farm employment, spin off businesses needed to support the processor, stable population (not only someone to drive the school bus but actual students riding in it), and so on. This is on top of having a local buyer competing for your grain. Now that you have that nice warm feeling, know this – there are some processing plants missing from Western Canada because we have the CWB and other places don’t. Put a price tag on that.

- In an open market, price signals come directly from the market; you can read them and react to them reasonably. With the CWB, the PRO is your only tool for reading the market. You could hold onto some good 6-Row malt barley waiting to be called for ‘cuz the PRO is $20/tonne above local feed values, only to have the PRO drop $20 or more in the end – or you could have your malt barley rejected. It’s happened.

- I always wondered about this; why is it that the CWB’s price contracts always include a factor for risk (something in the area of a $5.00/tonne discount) when the pricing options tend to be based on the PRO, which is already discounted for risk?

- And if you’re an organic farmer, well – you know.

Tom – sorry for the length, but I'm sure there's more. What do you think the WGMP would have said if it had the numbers on all these issues/questions? What would Goodale have said?

[TOM4CWB]

If not the WGMP Report... then what baseline, for changes, does Minister Strahl use?

[Incognito]

Tom:

You wouldnt use your seeding intentions in 2006 that were intended for 1995.

No dif for the Panel Report. It was valid then but now 10 years have passed and like your farm, seeding varieties change.

The only thing that remains constant is fertilizer - and the rate it can be absorbed.

That's deep - think about it.

Parsley: This one's for you:

The Parable of the Cave:

The primary reason Plato believed so strongly that only the educated should rule was that he doubted the abilities of the hoipalloi (a Greek word referring to the uncultured mob, or the common people). He thought these people simply didn't have a clue as to the reality of life around them. In what is known as "the parable of the cave," Plato likens the existence of most human beings to that of slaves living in a darkened cave. These slaves are chained facing a large wall. Behind them, and unknown to them, a large fire is burning. Between that fire and the chained slaves are people, perpetually moving about, their shadows thrown upon the wall that the slaves must face. To the slaves, forever bound in place, these shadows and the sounds they hear coming from the moving figures are all there is of reality. It is this reality that the slaves talk and think about, since it is all they know. In order to break the bonds of this "reality," a person would have to free himself from his chains, turn around and face the fire and the people moving to and fro in front of it. However, such an experience would probably be so frightening that it would result in the slave wishing to return to his original reality. And if the slave were forced to go to the surface, outside the cave, the experience of the blinding sunlight and vast panorama of this new reality would be nearly overwhelming. Even supposing that the slave became used to the reality of the world, he would never be able to explain it to his fellow slaves if he returned to the darkness of the cave, because their frame of reference didn’t include these possibilities.


plato believed most people were enslaved in their own bodies, not able to comprehend the reality beyond their humanity. A more modern interpretation, however, might indicate that we are still prisoners of our own illusions—illusions proffered in large part by the media. In fact, it was this very point that was the focus of much of the criticism of the media early in the twentieth century. For example, social philosopher and media critic Walter Lippmann referred to the reality painted by an opinionated media as "the pictures in people’s heads," alluding directly to Plato’s writings. Today, we have only to look at the phenomenon of the "Seinfeld Show" to recognize how readily people will incorporate fiction into their daily lives. What transpired on the Seinfeld show every Thursday night invariably became the major topic of conversation around the water cooler on Friday.

Thus, the "parable of the cave" has far-reaching implications for those of us today who base most of what we know about the world beyond our walls on what the media tell us. Plato may have been right to assume that most people will be satisfied with the shadows on the wall, given how difficult it may be to accept the "real" world. Certainly, this story carries an important moral not only for journalism, but also especially for advertising and public relations, whose primary role frequently is to cast those shadows.

Platonic view of the place of the media in our society was held (at least for a while) by Lippmann. In some of his earlier works, he proposed that information be controlled by an intelligent elite who would then pass it along to the media to be further interpreted for the people (not unlike Plato’s concept of the perfect Republic). All information disseminated this way would be completely objective and free of opinion. Although this particular "utopia" never came to pass, Lippmann is largely responsible for the idealized view of objectivity held by the press today. Thus, a Platonic view of the media would also place objective truth above all else, and allegiance to society above individualism. In other words, social responsibility would probably be placed ahead of press freedom. In addition, we would probably find that the entertainment media would be rejected outright as not contributing positively to society, a view becoming a bit more prevalent these days.

Best,

[Vader]

Sort of like the Matrix.

[Incognito]

They tried to shoot the messenger in the Matrix too.

More than once.

[parsley]

Thanks incognito, that was very interesting.

The blogs are displacing the media, and newspapers will go by the wayside, eventually. Good thing Lippmann lived in his era, because blogging would destroy his notion of acting as your interpreter.

There is an enduring and lingering need by a certain segment of our farm society, that want to interpet for us, and filter what we read, and decide what is best for us. And chose for us.

It never ceases to amaze me.

Doing so, exhibits the greatest disrespect, because they think we are not capable of making our own decisions or choices. They inevitably try to mask their grand-scheme macro-planning by correlating freedom to chose with selfishness.

And that lack of faith in your fellow man is what holds back a society, hindering and crippling it.

Agricultural producers are so imaginative and inventive, and coupled with such an admirable work ethic, it is a shame they are hobbled by central planners driven by failed visions.

We deserve unfiltered dreams. Farmers, (not the idea-censors), need to process and edit the information WE decide to access. Farmers need to be able to chose what our farm families need.

Modern communications will serve farmers well, with price discovery, real estate, marketing commodiites etc. at our fingertips. Gone are the days when Luddite propagandists will be telling you that your #1 wheat is worth $2.00 per bushel. The Lippmann era is 'passing on'.

You will finally be the expert on YOUR farm. And I think the day is coming soon, very soon, when we can sit down at the computer and write up a three year direct-contract for growing and supplying wheat to a buyer in a foreign country, with relative ease.

Aint life great.

Parsley

[TOM4CWB]

Parsley,

You have to read his Blog!

I though this is one of his classic entries!

Day 15

Governments keep us safe

Thank goodness for warning labels. Without warning labels, most of us would be changing oil in the lawn mower while it was still running, using our propane barbecues to heat our living rooms, and taking the toaster into the shower so we could have a snack while we cleaned up.

None of these risky actinities happen because the government and big businesses ensure we have adequate warning labels. Governments make us safe, (thank you, government) and how my parents grew up without warning labels is still one of life's mysteries.

My favorite label was on a prescription of sleeping pills I was given one time during a visit to a hospital. The gaudy orange sticker clearly warned that “this product may cause drowsiness”.

What a relief to know that!! I WAS going to pop a couple of pills moments before I had to drive through the Fraser Canyon, but that warning label changed everything.

(For the record, I no longer use any sleeping pills, choosing alternative medicine- watching John McCallum answer questions- to alter my state of consciousness).

My new favorite warning was on a new non-stick frying pan I purchased recently. Besides the usual warnings about “not placing your face in this pan while on the stove”, this one also came with a CAUTION, which read: (I'm not making this up)

“For safety reasons, please keep pet birds out of the kitchen. Bird's respiratory systems are sensitive to many kinds of household fumes, including the fumes from extremely overheated non-stick pans. “

Thank goodness (once again) that warnings like this are issued to cooks like me. Here I was, a loyal pet cockatoo by my side, dicing onions into an extremely overheated pan, the fumes of which make my feathered friend woozy.

The labellers have their priorities straight after all. Birds are a worry, while human babies in the kitchen can apparently suck in the fumes and thrive.

I love our brave new world, and am always grateful for the direction I receive from folks more informed than I. They keep me safe.


posted by Chuck Strahl @ 6:33 AM

[chaffmeister]

Ok - now that you've gotten your philosophy fix for the day, let's get back to the original question.

Tom, as I mentioned, the only things left of the WGMP recommendations are:
1. open up the market for feed barley (but keep malt under the CWB), and
2. open the wheat market for new, unlicensed varieties (while the CWB continues with the licensed varieties).

Do you really want to see these two suggestions go ahead. As Incognito said (sort of), we're so far beyond that now.

After reading Chuck Stahl's thoughts on warning labels, I kinda doubt he would have much patience with the half-way measures the WGMP came up with.

[Incognito]

Parsley:

there is the link from Plato:

http://jcomm.uoregon.edu/~tbivins/J397/LINKS/PHIL_LINKS/Plato.html

if i start writing like that, borrow a hammer....

Best,

[parsley]

chaffmeister,

You understand , more than most, how important it is to have personal vision. A philosophy.It guides what you implement, what you decide, how you approach life.

If I were to fault farmers, it would be to say that, although they have very deep personal philosophies, they do not articulate them. Encourage such a rarity!

The farm community must be optomistically prepared to examine their personal traditional beliefs and philosophies, which will result in either re-affirming that ideology, discarding the ideology, or perhaps some adaptation.

Parsley

ADDENDUM: According to the CWB, the majority of farmers support state marketing, so the CWB should anticipate little difficulty with farmers getting export licenses. A few gun-totin' Border runners bypassing the CWB, while at the same time staying within WGMP recommendations, should bring a sigh of relief from Ritter et al.

And for those handful of rebel farmers, the threat of being shackled in chains for selling what you grow, simply disappears.

[Incognito]

thanks for getting the parable, Parsley..


I figured you would...

[chaffmeister]

Parsley:

No worries about the philosophical musings – wasn’t complaining – actually enjoyed it. Just wanted to get back to the question before Charlie told us to!

If you’d be happy with the limitations inherent in the old WGMP recommendations, assuming they would allow the freedoms you suggest, that’s fine by me. I’m not a farmer so I can only reflect on what makes you guys happy. My approach to these questions and issues has always been from a market effectiveness perspective. In other words, if that would make you happy, that's great – but in my view it (the market) could be much better than the WGMP recommendations would allow. And that's my personal philosophy!

Also – not sure that I share your concern for Ritter et al (and their collective sighs of relief)...

[parsley]

Tom, I've often read Strahl's blog and enjoyed his 'shared-duty with Monte' comments.

http://www.montesolberg.com/blog.htm
"Unlocking your unlimited potential though napping" has to especially be pertinent for an old and tired farmer, Vader.


Of course, chaffmeister, I do not know one single old farmer who is/was incapable of selling that old bull. Therefore, I do not think ,for one minute ,that farmers are marketing morons.

The biggest hurdle has been the freedom to market. Once we are enabled, new doors are opened, not only for farmers, but for all players.

I agree we no longer point to the WGMP Report as the path of the righteous Liberal-annointed farm saviours, TOM4CWB no longer wears the 60's fortrel bell-bottomed pants (although if he insists on using the WGMP as THE successful marketing gauge, we might stuff him into a pair, and sink him), and the CWB's Liberal fundraisers are no longer THE event of the Year in Winnipeg.

Parsley

[parsley]

incognito,

What a clever post The Parable of the Cave was!

I bookmarked the page. Now you need to put Aristotle through the fanning mill.


Parsley