From Chairman Obergs' BLOG.
IT won't let me post a comment... so next best is to post here on Agriville.
Monday, July 18, 2011
Who will get blamed if the CWB is gone?
I’ve wondered about this quite a few times in the last few weeks, as Minister Ritz and others have blasted the CWB board and management for failing to create the model for a successful CWB in an open market.
Apparently, all that you need to get around hard, economic reality is vision and creativity. I’d argue, quite frankly, that we don’t lack for either, but that really isn’t the point of this post. What I have wondered is – who will be left to blame if the CWB is gone?
Oh, for a few months into the open market, Minister Ritz and his supporters will keep on talking about how the CWB failed. But that will only last so long. Right now, the government is planning a massive change, one that will have huge economic impacts across Western Canada. They are about to pull out the rug from an organization that returns between $4 and $7 billion a year directly to grain farmers. And they are doing so without having done a shred of analysis (I mean: zero) on what the impacts will be.
The minister is arguing value added processing will flourish, wheat acres will climb, returns to produces will improve. If he can produce a single paper or briefing note, prepared by the army of AAFC policy analysts, grain marketing ‘experts’, financial officers, etc that presents the information that supports these conclusions, I’ll be impressed. Especially if it was prepared in advance of May 3, 2011.
He’s also saying the CWB can be strong and viable in an open market. A government-appointed task force concluded otherwise in 2006, but hey, he’s a politician, and he’s a master of the sound bite.
So look ahead to the fall of 2012 and the winter of 2013 and imagine the scenario if the single desk is gone. Maybe there’s been a seamless transition to an open market. I’m going to guess there hasn’t been, based on the Australian experience, which I’ll be blogging about shortly. There won’t be a CWB. The Grain Growers, the Wheat Growers and the Barley Growers will most likely continue to put out a flurry of news releases talking about how well everything is going and praising the federal government.
The problem is, most farmers aren’t easily manipulated. As a group, we tend to put more faith in our own common sense than anything else. When someone argues the sky is green, and you look up a see a blue sky, 9 out of 10 of us will call BS.
My guess is, then, that the federal government is going to have to find someone else to blame, and my suspicion is that it will be industry. It has actually been intriguing to watch Curt Vossen especially, but also Mayo Schmidt and some other players give interviews talking about how well things should go once the CWB is gone.
I think, in a certain respect, they are correct. Their profits will increase, which is what a private sector company wants. Instead of those profits going directly to farmers, they go to their shareholders. I think that as those profits increase, and as the Minister faces growing pressure from farmers negatively affected by these changes, he will be looking for another scapegoat. "
One thing we know for sure...
if the CWB survives...
Chairman Oberg will not be responsible if the CWB is suessful...
An operational CWB... as a sucessful commercial business... will be in spite of all his efforts to destroy the CWB and any value it has now!
Don't I remember... not 2 years ago... the CWB claiming they were a simple commercial business?
IT won't let me post a comment... so next best is to post here on Agriville.
Monday, July 18, 2011
Who will get blamed if the CWB is gone?
I’ve wondered about this quite a few times in the last few weeks, as Minister Ritz and others have blasted the CWB board and management for failing to create the model for a successful CWB in an open market.
Apparently, all that you need to get around hard, economic reality is vision and creativity. I’d argue, quite frankly, that we don’t lack for either, but that really isn’t the point of this post. What I have wondered is – who will be left to blame if the CWB is gone?
Oh, for a few months into the open market, Minister Ritz and his supporters will keep on talking about how the CWB failed. But that will only last so long. Right now, the government is planning a massive change, one that will have huge economic impacts across Western Canada. They are about to pull out the rug from an organization that returns between $4 and $7 billion a year directly to grain farmers. And they are doing so without having done a shred of analysis (I mean: zero) on what the impacts will be.
The minister is arguing value added processing will flourish, wheat acres will climb, returns to produces will improve. If he can produce a single paper or briefing note, prepared by the army of AAFC policy analysts, grain marketing ‘experts’, financial officers, etc that presents the information that supports these conclusions, I’ll be impressed. Especially if it was prepared in advance of May 3, 2011.
He’s also saying the CWB can be strong and viable in an open market. A government-appointed task force concluded otherwise in 2006, but hey, he’s a politician, and he’s a master of the sound bite.
So look ahead to the fall of 2012 and the winter of 2013 and imagine the scenario if the single desk is gone. Maybe there’s been a seamless transition to an open market. I’m going to guess there hasn’t been, based on the Australian experience, which I’ll be blogging about shortly. There won’t be a CWB. The Grain Growers, the Wheat Growers and the Barley Growers will most likely continue to put out a flurry of news releases talking about how well everything is going and praising the federal government.
The problem is, most farmers aren’t easily manipulated. As a group, we tend to put more faith in our own common sense than anything else. When someone argues the sky is green, and you look up a see a blue sky, 9 out of 10 of us will call BS.
My guess is, then, that the federal government is going to have to find someone else to blame, and my suspicion is that it will be industry. It has actually been intriguing to watch Curt Vossen especially, but also Mayo Schmidt and some other players give interviews talking about how well things should go once the CWB is gone.
I think, in a certain respect, they are correct. Their profits will increase, which is what a private sector company wants. Instead of those profits going directly to farmers, they go to their shareholders. I think that as those profits increase, and as the Minister faces growing pressure from farmers negatively affected by these changes, he will be looking for another scapegoat. "
One thing we know for sure...
if the CWB survives...
Chairman Oberg will not be responsible if the CWB is suessful...
An operational CWB... as a sucessful commercial business... will be in spite of all his efforts to destroy the CWB and any value it has now!
Don't I remember... not 2 years ago... the CWB claiming they were a simple commercial business?
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