CWB History

[Ron]

Been doing a little history search of the CWB and found this little quote.

On Sept 27, 1943 the CWB monopoly was established. "Its purpose was for the government to gain control of the wheat stocks and stop further price advances."

Boy they have been dam successfull in accomplishing that for the last 60 years.

[TOM4CWB]

Kernel;

Interesting you should bring this topic up!

Did you know today's CWB Act does not at all create a monopoly... in fact the 1947 CWB Act (the basis for today's Act)allowed exports of farmers grain that didn't go through the regular elevator system... without any buyback or problems with customs!

It is only since 1993 that the real iron gripped Liberal dictators illegally stopped us from proceeding with marketing choice!

[eatmorewheat]

CWB is history.

What a dark page of Canadian history it is too.

Free wheat in the west.

[TOM4CWB]

Kernel;

Speaking of CWB history...

It was very obvious that we had a CWB tag team, consisting of Tom Halpenny, and Vader, in October 2002… pushing these CWB “single desk” “monopoly theories…

Vader… a recent CWB convert (in past Agri-ville topics had been for market choice), was recruited to be the CWB mouth piece during the CWB Election period.

Let’s have a look at how CWB MONOPOLY Selling works:

Vader in;
““How do you define Commodity Marketing?” Agri-ville Oct 25, 2002 9:49 TOPIC:

“Normally we market about 20,000,000 tonnes of wheat out of Canada….

Perhaps if we "planned to have" something less than 20,000,000 tonnes of wheat each year we might be able to "sell at a high price" more often.

How do we do that? We don't have a supply managed system. All we have is the PRO. The PRO doesn't always reflect a profitable sale for many producers and yet they continue to produce large quantities of wheat."

Since the PRO is the “Pool Return Outlook” for a specific grade and class of grain, as calculated by the CWB itself, the CWB has the power to fulfill it’s ...own ...prophesy … how convenient.

Please note Vader says: “All we have is the PRO. The PRO doesn't always reflect a profitable sale for many producers”… This is an ...admission ...that the CWB PRO is a political tool to manage and control production.

VADER continues; “What if … you could divide up CWB sales into different price ranges and each producer could exercise individual control over which CWB sales they participated in? Perhaps a sale to one country would make sense while a sale to another country would not.”

Kernel, the above statement, shows that the CWB intrinsically is based on price discounting,… unlike our open market crops… which work off the supply and demand system to determine price.

NOW the CWB MONOPOLY admits the “single desk” stops the commercial normal market forces from working…

“Rather than offer all of their grain to the CWB, some producers might decide not to participate in lower value sales once they have covered their cash flow requirements.”

So now the CWB “Monopoly” goes to work in 1943 command and control true style…

“This grain [could be] (MONOPOLY forced by the CWB) carried forward to sell to the high end markets the next year or offered to the domestic feed/ethanol industry.”


It is very interesting that by far the majority of the times, the CWB “MONOPOLY” buy-back charges are proportionately much higher on lower grades of wheat and barley…

WHILE... concurrently... the buy-back subsidizes high grade CWRS sales to the United States, much of the time each year.

The CWB refuses to pay fair market (FMV) value on lower pools of grades of grain… even though intrinsic value of the grain in these classes and grades of grain is very high! CWB Control forces these grains, either to the CWB at below Fair Market Value (FMV) (a low PRO), or, into reserve, or into the domestic Canadian market.

As the CWB’s Vader put it… “carried forward to sell to the high end markets the next year or offered to the domestic feed/ethanol industry.”



This CWB under valuation of lower graded grains is intrinsic to the CWB “Monopoly”, in reality, this is the functional command and control element of the “single desk” “Monopoly”.

How did I arrive at this statement?

Let is review;

High grades of CWRS...#1 and #2CWRS buy-back prices are, for the majority of most years, at a value lower than the pooled value, thereby subsidizing sales to the US.

This then under values high quality CWRS #1 and #2 wheat in the CWB Pool.

Other classes of wheat and CWRS Lower grades with high value, have on most years for the majority of the time, been assigned very high buy-back values (COSTS TO BYPASS THE CWB).
To clarify, the pooled price assigned these high value lower graded grains is below FMV… the significant majority of the time lower than the domestic Canadian value….

Since the CWB buy-back is much higher than the pool value… … presto, a tariff (the CWB buy-back) forces the “designated area” grain producer to do one of the following:

a) sell to the CWB at a lower price than Fair Market Value(FMV);

b)sell to the domestic market for feed or ethanol;

c)store the grain until next year;

d)grow a non-CWB grain.

Kernel ;

This clarifies why the United States and many other countries are furious with the CWB specifically(WTO action initiated).

[ianben]

Tom dont these options give you some marketing choice?

Surely you accept that today there is not a market for 20million tonnes of quality wheat.

The fact that you cannot sell to US does distort the market but what would happen to US prices without CWB.

Would they stay the same with unlimited supply from north of the border?

I think you place too much blame on CWB when over supply world-wide is the problem.

Or perhaps the problem is supply exeeds the hungrys ability to pay while the rich eat far too cheaply.

I think allowing Canadian farmers free access to US markets would make this worse.

US citizens would get even cheaper food and poor countries would export even more food to pay their debts.

How do we break this cycle?

What would your view on this be? I am I wrong somewhere?

[TOM4CWB]

Ianben;

I see you missed the point that much of the time CWRS #1 and #2 is actually subsidized by the CWB Buy-Back system, this gains market share into the US, not restricting it as you wrote.

Since much of the wheat is CWRS, this has the biggest impact... and the US knows this.

On the monitary systems... this is a whole different story...

Why do we allow banks to create money and charge interest... on money that is simply a tool of the people and for the people to begin with.

Money supply can easily be managed without the use of interest as the tool to control money supply... the past 5 years should be proof enough of this.

Canada has gone from 3% of Canadian Government debt owed to the Bank of Canada in the early 90's to 7% today, and we have the biggest reserves in the Bank of Canada in History because of this policy.

Foreign Debt borrowed from another country is the problem 3rd world countries have... they need to be industious enough and have enough vision to create their own future...

Paying interest payments is impossible, as the currency is not created to pay the interest payment, when the loan is created in the first place...

So either deflation is incured, or more loans must be taken out to make the interest payments... hence 3rd world economies are failing... debt forgiveness is required... foreign aid given... one tangled mess upon another!

Wealth is an interesting topic... much could be debated on this subject!

[ianben]

Tom

I was trying to point out that perhaps Vader was right and you no longer have a premium market for 20million tonnes of wheat.

Supply and demand will lower prices no matter who sells yours and mine.

Alternatives b,c,d are a choice you have and the guy from Cargils in Brandon was asking you for more canola.

Regualar and guarenteed supply though!! Can you supply what is in demand? Surely this is the way we should decide what we grow.
Better market requirement information back to the grower with some promisees in return if we produce the goods.

The internet provides the simple way to give this information and allow growers to fill customer needs.

Perhaps in future we could grow to order instead of just growing what we always have!

[TOM4CWB]

Ianben;

I cannot believe that "extracting" a high price, for only a segment of the production... is productive.

Substitution will remove the premium... the CWB premium on our wheat... and we become then far worse than your neighbours to the east... they sell low quality wheat at a low price... we "designated area" farmers end up selling the vast majority of our high quality wheat , on many years..., at low prices... this truly affects you Ianben, it lowers the price you receive.

If I choose to sell high quality wheat at a low price... so be it, then I made the choice for some economic reason to sell... but if the Government of Canada forces the sale of my high quality wheat on me... against my better judgement.. and insists my products be sold at low prices... I OBJECT.

In a free and democratic country, the government does not have the right to confiscate the citizen's property... without fair compensation.

The US farmer gets far more return for the same as CWRS CDN quality of wheat...a higher price than does Canada... because the US marketing system chooses to respect the needs of US farmers. HIGH QUALITY COSTS CDN FARMERS BIG MONEY. To give away quality at discount prices hurts every grain producer on this planet.

[TOM4CWB]

Tom: The l993 change in the CWB Act was caused because the CWB refused to market wheat from Manitoba that was infected by Fursarium diease. The farmers found their own market for the wheat in the USA at a decent price. While they were marketing this wheat they discovered that they could market other wheat and barley there at better prices. Up to this point most farmers were led to believe(by CWB propaganda) that it was illegal to sell wheat and barley to anybody but the CWB.

Then along came Art Maclin and Nellie Weibe of the NFU crying foul and demanding that the CWB prosecute the farmers for not obtaining a license.
Thus the CWB changed the ACT to allow prosecution. A clear and precise act to protect a bureaucracy. That believes thru 60 years of deranged thinking that they are getting farmers a premium thru the pooling account but not knowing they were killing the family farm in the process.(Socialist wealth killers).

Look at the proof when the CWB anounced that they were removing themselves from the market the price of wheat went up. You might argue that it when up because our supply was removed from the market but I would begg to say it went up because normal buyers from the CWB were unsure of their supply and their price, therefore more action on the open market. This is why I believe that the CWB monopoly drives the world price down because it is traded outside of the free and open pricing mechanism.

[TOM4CWB]

Kernel;

It takes a huge amount of resourses to create infrastructure for exports like we have invested in here in the west.

When very profitable wheat prices are created... the eastern block countries are given a gift... big money is sunk into infrastructure to deliver FSU wheat more efficiently... competition is created against our future wheat production.

The CWB does no favours for any "designated area" wheat grower by driving up prices to $9.00CDN port price...

Next year production will go through the roof... to fill a market that didn't exist in the first place.

Substitution of our products has taken us out of the market... it will take many years to heal the wounds the CWB has created in our customers over the last 6 months.

If the CWB had not pre-sold wheat it did not have in May and June... the market would have gone up more quickly, earlier... stayed longer at a more reasonable price... and been more stable for everyone.

Ianben... the objective of our discussions... is to create a stable... reasonable price for our wheat...

Instead the CWB creates much more volitility... both higher wheat prices (CWB calls this extraction of the monopoly) and therefore then by natural econmics... much lower wheat prices (the CWB calls this price discrimination) ...
to compensate for wheat over production created by artificially high prices created by the CWB in the begining.

A good annalogy... would be the Open Market Free Enterprise System of marketing is like a car on a rough road with a good stiff suspension,including good shock absorbers...

The CWB car however, has a suspension that is very floaty and loose... with no shock absorbers at all.

The CWB is almost always reacting too late... the timing being off creates the highs and lows that create the most difficulty for "designated area" farmers to understand what is happening... and how best to react to actual market signals... which adds to the volatility of the world wheat market...

Ianben, I hope I have better explained why the CWB is as bad for you... as it is for my farm!