cwb tendering process fails

[wedino]

With the cwb freight tendering process the producer shipping via producer cars is able to bypass the elevator charges & still benefit from the elevator freight tendering. I'm assuming that producer cars are not the most efficient from railway perspective.

Quote from WCWGA:
*** WCWGA SAYS MONITORING REPORT MISSES MARK...The Western
Canadian Wheat Growers Association (WCWGA) attacked a
Canadian Wheat Board (CWB) report outlining new
transportation reforms, which are having a different effect
than intended. "The first annual report on the monitoring
of the grain handling and transportation system has missed
the mark," said Art Enns, President of the WCWGA. "They
were supposed to deliver market signals back to farmers so
that they would use the most efficient facilities. Instead,
the savings are being diluted and farmers are waiting a
year or more to get a fraction of what they should be
getting at the elevator door."

"We used to get trucking premiums. We used to get grade
grains. We used to get better deals by shopping around,"
WCWGA Vice-President Bernie Sambrook said. "All these are
disappearing as the grain companies are passing savings to
the Wheat Board to win tenders."

According the WCWGA, the report acknowledges that
freight savings and elevator efficiencies are being
transferred to the Wheat Board pool accounts. The report,
according the Wheat Board, points out "the transportation
savings have earned in excess of $14 million" which is
"redistributed back to producers through the CWB pool
accounts." (See Quorum Report, P.20) "These are not savings
at all," Enns disputes. "These are monies that were taken
out of the pockets of individual farmers who marketed their
grain effectively and who patronized the most efficient
elevators, and are being spread around to all farmers."

[TOM4CWB]

Charlie,

I understand the CWB had another focus group meeting in Nisku yesterday, expounding the vertues of tendering, and single desk selling monopolies...

Earl Geddies asked;

"What can the CWB do to convince Alberta farmers that the CWB is doing a good job", or words to that effect...

So maybe Agri-ville forum participants have a few suggestions for the CWB?

[parsley]

The CWB is bigoted because they are only prepared to listen to one point of view...that being total CWB control of Western farmers. The majority of Western farmers in polls, do not agree with them. The Alberta Gov't thinks there should be some additional options looked at by the CWB. The Board dinosaurs cannot conceive that there may be another point of view brought to the table. Each of these Board Bigots need to get the video "Guess Who's Coming To Dinner" as a CWB corporate gift for Christmas!

Perhaps they could begin by Director Art Macklin refraining from calling the Alberta Government "irresponsible" on open radio shows, simply because the Alberta Government is prepared to look at a different point of view.

Parsley

[charliep]

The CWB board of director elections this fall will be a good indicator of thinking on marketing choice - particularly for Art. There will be clear choices in district 1 on candidate views on this issue. The challenge is to get the vote out.

I note your question Tom4cwb. I also note AdamSmiths about what answer the question was single desk or nothing would yield - assuming no other choice.

The start of this thread is also interesting. We are moving from a push system (what is in the elevator drives sales) to a pull system (customer needs drive deliveries). The latter system is driven by rewards for good delivery performance/meeting customer quality specifications going to the people who made things happen versus being shared by the system.

Important issues.

[parsley]

In order for Alberta producers to become dedicated Board converts, the CWB should skip the meetings and discussion groups and simply offer high paying jobs to Alberta producers. I only know of three Board converts that I can name in the past 15 years, and they are Hehn, Ritter and Flaman. They all worked against the Board as farmers, but going on Board payroll converted them into Single-Desk defenders.

Parsley

[parsley]

I found it interesting that the WCWGA doesn't like the tendering process, but were strong proponents of this change through the transportation reform.

Now that there is a commercial system, with penalties and rewards based on performance, the WCWGA doesn't like it. They forget that it is the grain co's themsleves who are bidding on these tenders.

And the anticipated 'savings' generated this year will approch $40 million, and the benefits distributed to all farmers.

Next year is 50% tendering, so we'll see if the strong competition on bidding for cars continues.

Deregulate the transportation industry, and the same thing would happen, only it would be the grain co bidding to the RR to get cars, and farmers would be out of the loop.

With 50% tendering and fewer elevators, delivery opportunity will continue to change. IN some areas it may diminsh, in others it may increase. The grain company determines which of their elevators receives their share of the cars, as long as it is within the port catchement area that was tendered. (eg Vancouver. The balance of cars are awarded based on where farmers' last delivery was. The cars follow farmers' choice of grain company, so if you change grain company, then the percentage of cars equal to your percentage of the total grain o/s remaining on contract with the CWB will go to the new company. So farmers have some economic impact they never had before when dealing with grain deliveries.

Tom

[wedino]

TomH, I don't think it is the tendering process that the WCWGA dislikes as much as the fact that the wrong producers are being rewarded. The producers that use an elevator that tenders are the ones to be rewarded, not all producers through the pool. Myself as a producer am able to load producer cars & still be rewarded through the pooling system for efficiencies gained by elevator companies that tender. (& that's not right IMHO)

[wedino]

TomH you can think of all kinds of benefits that you think the CWB creates for Western Canadian farmers because you are fighting for your job. What makes you think that the benefits to farmers wouldn't be better with a free marketing choice.

I think that an open market would change our profitability to the good eminencely. Opening the domestic and export market would create a huge value added industry in Western Canada and force railways to adjust their freight rates down for transporting a bulk grain product.. Want some prove look at the canola crushing industry, the pulse crop processing and the feed grain industry. Don't tell me what the CWB has created for value added in the flour milling and malting industry because that would be a drop in the bucket compared to what a free market will create.

All you hear from pay cheque takers like yourself is how bad farmers are at marketing their product. If the CWB is such a good marketer let them compete for my business. Don't tell us what is good for us. I build a business you fell into one. Give us a chance to move ahead. The horse a wagon days are gone and our ability to market has improved beyond your ability as the CWB can do for us.

I'am sorry I should be talking to my director Mr. Chatney but no one will listen to his common sense either. Tom you are a bright young man you should buy a farm, I know you could make it.

[parsley]

Good Morning thalpenny:

It is important that everyone who serves the Board, and that includes the Minister, Directors, and staff, respects the opinions and input of producers and farm organizations. I may not always agree with the National Farmers' Union, but I do respect their point of view, and I admire the amount of time and work that is plucked out of the farmer's day that is dedicated to participating in and supporting their organization.

The Western Canadian Wheat Growers Association is no different. I acknowledge that they often differ in how the Board should function, particularly with the Board itself, but staff has to be respectful of the fact that this is a group of farmers who invest time and money and want to be involved in decision making and want to break trail with Board policy because the end result will help them as producers.

There is simply too much staff influence. Unbelievably, Jim Petryk spoke to the media on behalf of the Board of Directors attending the Liberal Fundraiser. Stafffrequently bash the Western Canadian Barley Growers or the WCWGA, and even Members of Parliament, sometimes quietly, sometimes sneakily and sometimes openly. The CWB is out of control because they no longer know their place.

It has to stop. The Directors, and staff are there to serve farmers, and it is time they understand that they need to do a better job of serving farmers and they can only begin do that if they start to listen to all the farmers seated at the Wheat Board table as we begin a new path. And treat each of them with respect.

Parsley

[parsley]

Interesting responses. Very revealing for all to read.

How it got contrued that I don't respect the efforts of individuals with the WCWGA is a stretch. I expressed surprise regarding one WCWGA policy, tendering, which started this thread. My comments are not directed at people, or their contributions, but rather their policies. Whether I am associated with the CWB or not, when an association puts out a public comment, that type of public debate is fair game.

It is not a self serving motive that compels me to respond and bring greater awareness of the CWB to this and other forums - it's my belief that the CWB makes a bigger pile of money out of the grain available for sale than an open market would.

The view kernel expressed that value-added will explode without the CWB is an out and out myth. The growth in the last decade in milling capacity in Canada has outpaced the US, growing by 29% vs the US 18%. And the utilization of that capacity has grown from 70% of capacity to over 90% in the last decade. There is a positive balance of trade in favour of Canada now with the US on flour and flour products.

Canada has 3x the malting capacity per capita than the US, with growth of over 400,000t of capacity in the last decade, almost all in Western Canada.

It is largely the same companies making these investments in both countries, so that reveals the economics for value added under the CWb is viewed as favourable. So I’m not sure why farmers would bank on an ‘explosion’ of value added that will force the RR to lower rail freight rates in an open market. To think that we are going to have milling and malting capacity of 8-10 million tonnes, or half the wheat, durum and malting barley is not likely in the near term. That magnitude of change is just not going to happen quickly if at all. Obviously the grain companies knew that, or they wouldn’t have put almost one billion dollars into concrete elevators over the past 7-8 years.

This very large chat room has gained the moniker 'Angry-ville', and that's because of the very cynycial, opinionated, anonymous viewpoints that are placed by a few people.

I wonder if those people would be quite so quick with their comments if they had personal accountability by using their own name and associations, such as the moderators do, rather than a pseudonym? Perhaps for more accountability, transparency and responsibility for the postings here, real names should be used. That might reveal who the purveyors are of certain recurring viewpoints. I’ll let the Mayor of Agri-ville contemplate that one.

Tom

[wedino]

TomH, "Angry-Ville"?? It didn't happen to originate at cwb afternoon tea parties did it? By the way Do you still serve tea with all that fancy silverware at cwb head office?

For what it's worth, I'm Ormond Wedin from Midale, Sk

[charliep]

The question is my mind is whether CWB tendering is accomplishing what it was set out to do? Grain companies desperate for grain handle are cutting margins to both utilize their concrete elevators and push grain through their terminals. Is this process creating more value for customers and adding to efficiency of the grain system? Is it sustainable in the long term (recognizing they are businesses and making informed decisions in the short term environment).

My assumption is that a major part of the tendering process should be to draw grain forward from the farm gate to port in an efficient/low cost manner that gets the right grain into the right place at the right time. Individuals/grain companies that do the best job of making this happen should be rewarded.

[AdamSmith]

thalpenny, I'm not sure what your driving at with your complaints?

Does it really matter who's name is attached to whatever statement?

I was under the impression that this is a forum for exchanging ideas, not names.

The annonymity of the writers allow the ideas and opinions to be judged solely on the merits of the points being raised and the rational behind those points.

It may be of great concern to you and other CWB staffers but I don't think the many readers of these postings worry about who it is that is making the points. If the points are clear and the arguments sound that's all that is needed to have a disscussion or debate.

Your desire to attach names and associations reveals to me that you somehow believe the various points being raised would carry more weight or less weight depending on which person and which organization made them.

There are real and relevant issues being disscussed here Tom and I think the readers and participants of Agri-ville deserve better than having one of it's moderators whinning because he can't attach labels to the people who are making the postings.

[Everest]

I am one of probably many silent observers of this discussion forum. But, Tom Halpenny, you have finally provoked me enough that I have to come out of my silence. Your comments need to be responded to. They are just so misguided and patently wrong, that you must be challenged on them.

1. Tendering. Wedino is absolutely right. The tendering process you run is NOT commercial. Commercial means that anyone can participate if they wish, or conversely can pass if they think it will be detrimental to their business. Commercial means it must not be one-sided or unbalanced. Tendering to a monopoly is hardly commercial. A grain company with a mix of CWB grain and open market grain, tendering to a wheat monopoly cannot operate commerically. They are responding to a mixed environment where the CWB is centrally planning a good part of the business(sic), wheat and malt barley, and to a commercial marketplace that exists for everything else. I have real doubts that they are maximizing the use of their resources, or utilizing them as efficiently as they could if we had a REAL commecial system. Tom, you and CWB spinners can repeat as often as you like that the system is commercial, but it won't make it commercial just because you say it is. When I was a kid I was told that it didn't matter how many times I told the lie, it wouldn't make it true. Take heed.

2. Value-Added. Could a 65 cent dollar have anything to do with the increases you cite? Could foreign exchange rates not have more to do with these changes than "value added under the CWB"? You cite the last ten years of changes. Tom, the value of the Canadian dollar has changed more in the lsst ten years than the CWB or its policy directions. If the Cdn$ goes to 80 or 90 cents, what will value added activity on this side of the border do compared to the U.S.? It is a more than a little presumtuous of the CWB to claim any credit for increased processing. Or if its not, can it have anything to do with your statements about being "price competitive" to domestic processors? But no....it can't be that....you say the CWB captures premiums and passes them on to farmers. Hhmmm.

3. Playing Robin Hood. Again, wedino is right on the producer car points he makes. The tendering revenues the CWB has taken from farmers and put into the pool accounts, largely come from incentives that formerly went directly to farmers from elevator companies. Different companies called them different things, but they were and are there due to the investments and activities of the elevator companies and farmers. Now the CWB has found a way to grab them, and are playing Robin Hood. Should all farmers get an equal share when all have not invested equally to respond to the new system and its configuration? Should producer car shippers benefit through the pool accounts because other farmers have patronized elevators that have tendered for shipments? Isn't the CWB's grab at the incentives, and subsequent redistribution, really masking and distorting the signals farmers should be getting and responding to directly? Is this redistribution of $$ justifiable?

Tom, it is the escalating tendencies of the CWB to claim credit for things they can't take credit for, and for trying to redefine what people mean by "commercial", "choice", and "accountability" etc., that has precipitated your "corporation's" credibility loss. Not to mention weak, defensive statements regarding real blunders like sending 10 people to $400 per plate Liberal fundraisers. And will farmers forget the CWB's intransigence with Prairie Pasta kinds of initiatives? Or the PPO illusions? Or multi-million dollar increases in "public relations" spending? I hope you get the point....

[Everest]

Everest thanks for your clear and correct thoughts. Your a mountain of a man.

TomH: What makes you think the grain companies knew what they were doing by build large terminals and tearing down the small structures. Haven't they all gone broke since making that big move. You can thank the railroads and the CWB for creating the business atmosphere that caused their poor economical positions when they build the large elevators.

Lets keep getting this marketing think wrong as long as farmers are paying and losing their investments.


Hey great marketer, feed wheat in Alberta has been nearly the same price as good milling wheat. Thanks for capturing the great premium price for us price takers.