prairie pasta

[oilcan]

What message does this send to primary producers willing to invest in a co-operative to counter the already low commodity prices? Who benefits from keeping primary producers out of the milling business? Would a voluntary CWB, have the ability to build such a plant with investment from it's members, members being the actual stakeholders who are farmers? Just curious, as the long term viability of primary producers is my main concern.

[charliep]

Could you go into a little more detail on this issue? I am not aware of the background for your question.

[oilcan]

Charlie, The issue is one of a farmer co-operative, that being Prairie Pasta having the ability to not go through the buyback process at the CWB. Giving farmer members of this co-operative a much greater chance of increased revenue. As a farmer from Alberta I support Prairie Pasta fully and the farmers that worked for this. I am quite sure since you used to be an employee at the monopoly, you understand the issue quite well. It would seem economic democracy for individual praire farmers is again going to be denied by a management fully out of touch with farmers. Farmers are even denied the simple privilege of having a Hansard to review how their elected CWB directors voted and contributed to such an important issue for agriculture in western Canada. Perhaps the CWB should start supporting the plight of farmers like those who wished to find a means to increase their income through Prairie Pasta instead of harping how foreign competitors support their farmers.

[oilcan]

This is an interesting issue. On the one hand, the CWB wants to foster value added. The domestic Canadian market is the largest 'customer' for western Canadian wheat. It makes sense to increase that market to the extent possible. Complicating this goal, however, is the fact that there is a pricing policy in place that has been developed in conjunction with the Cdn National Millers Association. The pricing mechanism essentially replicates the same pricing principles used for pricing off a futures market. The formula uses Minneapolis futures (for red spring wheat) on any given day, and is backed off to the millers location, either adding freight to that futures equivalent price at Thunder Bay if it is going east, or deducting it from that value if it is going west. That determines the dollar contribution to the pool account. These are the same principles used in pricing to US locations. The total domestic market contributes significantly to farmers' total return. If farmers who aren't part of the the closed, new generation coop are effectively cross subsidizing a processor based on type of ownership, there are some significant fairness issues to those farmers, and to other processors. The processing of grain should not decrease the farmgate price, and the current process ensures a level playing field for all participants. Overall, value-adding must be achieved, not value-subtracting. Remember that the timing of booking sales is totally at the judgement of the processor. A good buyer for a processor would attempt to 'minimize' the cost of acquiring the raw product by seizing buying opportunities when the market looks soft. This is contrary to a farmer's desire, to sell at a point when the market is strongest. That's some background on the what the CWB Directors had to consider in making their recent decision. I think if there are innovative solutions other than the option the Directors put on the table providing a midpoint of the current PRO one time payment, let your local Director know. There is no buyback process in delivering to a local processor. The processor in this case would be responsible to call for the delivery of the grain according to their processing plan. The processor books the sale at his option, pays that value, and the farmer receives the pooled value representing all sales to all markets for that grade. Advance delivery calls are often provided to facilitate domestic processor's requirements. If a processor wants to pay the famer a value greater than the initial payment, (or a fixed one time value as in the PPP option) they can do that out of their own pocket. Also, remember that approx. 90% of the domestic milling industry is now American controlled. They participate in the Cdn pricing policy and ensure that there is no competitve advantage or disadvantage provided with the domestic human consupmtion pricing formula. Many of these companies are buyers on both sides of the border, and see the business from a North American perspective. The pricing principles would be the essentially the same on either side of the border. At the end of the day, the CWB provides information to help fledgling companies develop stronger and more accurate business plans, and is available to provide technical assistance to foster value added projects. Are there other areas that the CWB should provide assistance? Tom

[oilcan]

At the end of the day the CWB will be known for denying individual farmers the economic democracy of starting a value added co-operative to garner much needed revenue in western Canada. As for principles Tom, you can always look back and quote how fair the CWB was to everyone but individual western Canadian farmers striving to create a better income for their family farms through a value added co-operative. What should have been done years ago was change the CWB to a voluntary co-operative with the financial means through farmer members to enter into more value added industries in all sectors of the grain industry. It is an issue that causes farmers to question who exactly the CWB is working for. I understand it is a tough issue, as many farmer producer organizations fully support co-operatives and understand their importance to western Canada. Must be rather shocking to those Manitoba farmers in Keystone, who in their mandate fully support closed co-operatives to see the CWB shut down just such a badly needed revenue earner for western Canadian producers. Let alone the impact it would have on durum wheat bypassing inland gco grain terminals for a more profitable position at a farmer owned Pasta Plant. Do any CWB directors have former ties to large grain companies, Mr.Halpenny?

[oilcan]

You can check out the bios of all the Directors at the CWB site - http://www.cwb.ca in the 'About the CWB' section. Tom

[oilcan]

All directors should be elected primary producers, conflict of interest guidelines should be amended, and provincial boundaries reinstated. Perhaps this would help instill some progressive improvements to the CWB. As it is many of those directors do not even raise durum wheat or have an interest in farming.