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Reining in the Canadian Wheat Board

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    Reining in the Canadian Wheat Board

    National Post
    Published: Monday, February 08, 2010

    When the Supreme Court declined recently to consider the case of Canadian Wheat Board v. Attorney General of Canada, it brought a welcome end to a long, rancorous debate over the question of who, ultimately, has authority over the Canadian Wheat Board (CWB). The answer, we can now be certain, is that the agency remains, as Ottawa has always considered it, a creature of government, answerable to our country's elected representatives. This is how it should be.

    Ottawa may permit Crown Corporations to act with a degree of independence; it would be ridiculous for John Baird, the minister responsible for Canada Post, to involve himself in the day-to-day operations of that sprawling enterprise. But ultimately, the post office still belongs to the Canadian people. It is the minister's role to represent our interests, and he does, and must have the authority to bring our influence to bear on the corporation when necessary.

    The Wheat Board's directors had, however, other ideas. Because of changes made to the Canadian Wheat Board Act under the previous Liberal government, allowing a majority of directors to be elected by farmers, reducing Ottawa's appointees to a minority, directors had come to believe that they were only answerable, as chairman Larry Hill recently said, "directly to the people who elect us." When Canadians elected a Conservative government, which began working to unwind the CWB's 75-year-old monopoly over Western barley and wheat sales, the board's directors declared war on the government. They unleashed an advertising and public relations campaign designed to frustrate the government's work, trying to turn farmers against the government's plan, and launched legal challenges aimed at thwarting the Conservatives' efforts.

    All of this was paid for using funds collected by the Western farmers forced to fund the Wheat Board, a substantial number of whom, as it happens, support deregulating the CWB's monopoly: A 2007 plebiscite resulted in a majority of barley producers endorsing their right to choose to market their grain outside the board. In 2006, Chuck Strahl, then the agriculture minister in charge of the CWB, issued a directive to the board's directors: The revenues they collect, he said, were to be spent on the orderly marketing of grain -- the CWB's mandate -- not political crusades. The directors took him to court, insisting the minister was not the one who was "controlling and calling the shots for the organization," as the Wheat Board's CEO put it at the time. And while a federal judge initially agreed with the directors, an appeals court found that ruling was made in error. The language of the Canadian Wheat Board Act is specifically written to "provide the Governor in Council with the authority to direct the Wheat Board on any matter of governance in the event of a disagreement with the board of directors," the appellate judges ruled. With the Supreme Court's refusal on Jan. 21, to reconsider the decision, that ruling stands.

    This is an important victory for Parliamentary primacy that extends beyond the farming community. It's true that member farmers have a personal stake in the CWB's fate, but ours is not a country that grants affected groups a trump card on policy. We don't give fishermen exclusive control over fisheries policy or grant lumberjacks the privilege of writing our forestry laws. (In any case, all Canadians who eat pasta or drink beer are touched indirectly by Wheat Board policy.) Whether Prime Minister Stephen Harper is making the right decisions or the wrong ones is something he'll answer for in the House and at the polls -- though, for the record, we believe every Prairie farmer should enjoy the same rights as his eastern cousins: the freedom to sell his own goods to whomever he wishes.

    No Crown agency can be allowed to defy its owner, the Canadian public. This government came to Ottawa with an explicit mandate from the electorate to end the Wheat Board's monopoly; opponents of that approach can continue to publicly protest using their own funds. We're quite sure that's exactly how Canada's Parliamentary system was intended to work.

    #2
    Okay Ritz how long are you going to ignore this ruling? The ball is in your court.

    Comment


      #3
      Fransisco,

      We have some feed barley for sale.

      I just phoned the CWB... guess what... they are not selling feed barley.

      The monopoly seller... with the whole planet to 'extract a premium' from... can not sell any barley... UNLESS:

      I happen to sign up a COntract... the initial price the CWB pays me for my barley... $17.37/t... after freight/handle deductions.

      I ask for an EPO... 100%? 90%? NO.

      No early payment option prices... because there 'are no sales'.

      So if I signed up to this 'monopoly'... I am allowed to sell my 48lb barley at about $20/t... when hay is worth $140/t... the CWB expected price about $90/t

      No wonder why Supply/livestock folks love the CWB... it extracts the lowest grain prices on the planet... out of 'designated area' grain growers.

      And they get to vote on continuing this monopoly!

      Now... if I want to sell to this 48lb feed barley to the US... using Producer Direct Sales... I am told I will need to pay the grain co. $10/t plus the CWB $168.65/t... plus freight to get that barley to the US $20-30/t... $200/t plus... cost for a return of... for a return of... possibly less than half this amount.

      PLUS all the risk I must take for the CWB!!!!
      TO Pay the pool accounts!!!

      What a farce!!!

      Comment


        #4
        It's been suggested that handing out no buyback export licenses for feed grains and non registered varities might be a good place to start for Ritz and company.

        Comment


          #5
          Why sell your feed barley to the CWB?? you don't have to. Sell to a feedlot!!

          Comment


            #6
            johndeere1

            You are right. 95 % of the time (or more), the local feed market is your best sale for barley.

            What is annoying about the CWB system for barley is the lack of market signals back to the domestic market.

            The way sales are made today starts with guaranteed delivery contracts (GDC) made available through grain companies. It may be simple initial payments or it may be some type of incentive offered by the grain company or some type of cash contract offered by the grain company/sanctioned by the CWB.

            What happens if there isn't enough sourced through farmer GDC contracts? The CWB then works with the trade (read grain companies) to purchase non board supplies in lieu of farmer deliveries to the CWB. Some of the price signal may (not guaranteed) be reflected back to you in better elevator bids as the grain companies encourage you to deliver to fill the void.

            What happens if there is a profit on the CWB sales outside the pooling system(which by the way was likely arranged and executed by the grain company). Can't say for sure this year but in the past, profits from CWB cash grain trading feed barley was deposited in the contingency (reported in the annual report with the 08/09 one being released shortly).

            Long and short, you would still likely sell to the local market in an open market. Export sales though would be made in competition with the domestic market and full value paid to farmers - not moved around in the pooling system or worst confiscated for the contingency fund.

            Comment


              #7
              Off topic but the 2008/09 CWB annual report will be an interesting read. Should be available in the next 2 to 3 weeks.

              Comment


                #8
                Charlie,

                Both you and JD1 missed the point.

                If the CWB is worried about selling below the PRO... that is one thing... but the CWB says the market is above the PRO. Close to $30/t above... if one grew right on the border with the US... and had a market just across south of the 49th.

                But the CWB is NOT here to maximise barley growers returns... they are here to assure the livestock industry has the lowest prices possible. PLUS... by far the majority of the livestock industry... have permit books... and can vote in CWB Director elections.

                It would not be overstating the truth... to propose that there are more livestock/mixed farms who have the right to vote... than commercial grain growers who have the single source of income from grain production.

                If this is allowed to be maintained in the CWB elections system... we run a strong probability of never stopping the 'Great Grain Robbery' 'designated area' grain growers... must endure.

                I sure hope the second world war (CWB started by 1943 war measures act) on my farm... ends... before the third world war begins!

                Comment


                  #9
                  The CWB's own words: "Off-board grains cannot be exported."

                  That is their arbitrary policy, and that's why Minister Ritz and the Government needs to step in and order the CWB to issue export licences to producers for off-board grains.

                  As Charliep says: "Export sales though would be made in competition with the domestic market and full value paid to farmers - not moved around in the pooling system or worst confiscated for the contingency fund."

                  Minister Ritz is also the Minister of Agriculture and surely he has a duty to not allow such unauthorized abuse of farmers.

                  Comment


                    #10
                    Raven,

                    One farmers' (being the designated area grain producer) loss... is another farmers' (livestock) gain!

                    We are free in western Canada... free to do what we are told!

                    Comment


                      #11
                      Let's all go to the Vancouver, Olimpics and sell our grain to the world. Then it can be removed from Kanada, one pocketful at a time. Once our samples git outta Kanada and the world sees what a greeeat product we produce, they'll start demandin the end of the cwb and freedom will rain. Then us's wit our home computers kin really sell som grain!!!!!

                      Comment


                        #12
                        Burbert,

                        You think this is funny?

                        Need to pay bills... ship feed barley... the CWB pays $20/t? We were told this was a new erra... the more the world changes... the more it stays the same.

                        Obviously you do not have loans to pay off... and bills to pay from board income for grains.

                        Otherwise... how could you think the CWB's total incompetence is funny?

                        Comment


                          #13
                          Great idea Burbert, but I think there is a catch. The CWB enforcers will simply take a little time off from measuring farmer's durum bins to consficate farmer's bags of wheat at the BC border.

                          More seriously Burbert, your neighbors are able to sell their feed barley freely as off-board throughout Canada. Would you be okay with them also being able to export it off-board?

                          Comment


                            #14
                            This from Viterra - Feb 08, 2010.

                            Malt Barley

                            - The 2009-2010 CWB Designated Barley PRO's for January were unchanged:
                            -2 Row - $211/mt in-store Vancouver/St. Lawrence
                            -6 Row - $193/mt in store Vancouver/St. Lawrence

                            - The CWB has increased their export projections to 1.3 million tonnes of bulk malt barley. Quality downgrades in the Australian malt barley crop and steady demand from China has created sales opportunities for Canadian malt barley.

                            - Overall, the quality of the Canadian new crop malt production has been good. The six row crop has been the exception due to mold issues. Movement for new crop malting barley has picked up.

                            - Reports on the malt barley crop in Argentina indicate that both yield and quality is lower than expected.

                            - Production estimates for the Australian malt barley crop have dropped to 1.5 mmt due to adverse weather events including a heat wave, followed by an unseasonable heavy rain. As a result there are quality issues in the Australian malt barley crop.

                            Barley

                            - March Western Barley futures closed at $148.50/MT on Friday which was a modest gain of $0.50/mt on the week. Spread activity has been quiet but should pick up into the last half of February with open interest at a rather smallish 497 contracts in the March. Full carry in the March/May remains $7.23/mt.

                            - The Lethbridge delivered cash market weakened to $146/mt on the week. End users remain reluctant to buy cash in deferred positions with ample barley stocks in Saskatchewan. Some feedlots have moved to a finishing ration of 1/3 barley, 1/3 DDG, 1/3 wheat which continues to put downward pressure on the cash barley market. Feeders are torn right now as they move out finished cattle; do they replace those numbers with beasts that pencil a loss?

                            - The CWB has Japanese interest for 55,000mt export business for the first half of April. It remains to be seen whether this tonnage will trade. Canadian barley is at an extreme freight disadvantage to Australian barley for this market. The CWB left its PROs for feed barley at $152 in store VCR stating quality issues in Australia and softness in Chicago Corn as reasons for the market weakness.

                            Comment


                              #15
                              Burbert needing to pay bills? My guess is he doesn't even farm anymore. Just another retired farmer who thinks he should vote and knows whats best for actual farmers. Look at his posts and the way he writes. All he is trying to do is cause trouble. Typical NFU. Deflect away from the issue and take up time talking about nothing so that nothing gets accomplished.

                              Comment

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