WTO... fallout.... STE for Russia?

[TOM4CWB]

"Russia may create state controlled grain trading company

(World-Grain.com, July 30, 2008)
by World Grain Staff

--------------------------------------------------------------------------------




MOSCOW, RUSSIA — The U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) said July 29 that the Russian Ministry of Agriculture intends to transform its Agency for the Regulation of Food Markets (AFM), an open joint stock company, into a major Russian grain trader.

The FAS said rumors that the Ministry of Agriculture would re-create a state grain trading corporation, similar to the Soviet-era Ministry of Grain Products, have been flying for months. According to these rumors, the push for a greater government role in both domestic merchandising and exports has not only been supported by major agricultural holding companies, it in fact was actively promoted by them. Certain holding companies, despite enjoying record high prices for grain, reportedly face serious financial difficulties and are looking to the government for what amounts to a partial buyout of their grain handling assets. According to these rumors, trade in oilseeds (primarily sunflower and sunflower products) and sugar will also be handled by AFM.

The FAS said the Russian ministry is waiting for government approval to transfer its controlling interest in 28 of Russia’s major grain elevators and terminals, including its grain terminal in the port of Novorossiysk, Russia, to the AFM. This major pool of government–controlled grain elevators will create the foundation for large-scale federal grain trade, the FAS noted. If the idea is implemented, experts believe the government will become Russia’s primary grain trader and exporter. Government control of these grain elevators will create the basis for its control of Russia's grain trade and exports, and may well constitute creation of a state trading enterprise.

Early in July 2008, the media reported that the Russian government supported the Ministry of Agriculture’s idea to create a company uniting all federal assets in the grain marketing-system. According to media reports, the Ministry of Agriculture has taken the following steps in this direction:

• In the beginning of 2008, the Ministry of Agriculture transformed the Agency for the Regulation of Food Markets (FGUP FAP) from a Federal State Unitary Enterprise into an Open Joint Stock Company (OAO), now known as AFM. Minister of Agriculture Aleksey Gordeyev stated that the agency’s new legal status is that of a commercial company, not a state corporation.

• The Ministry of Agriculture developed a plan to transfer the government’s shares in 28 major Russian grain elevators and terminals to AFM. With an estimated worth of $300-$400 million, these include some of the most valuable assets in the grain industry, the FAS said. A grain and bread conglomerate in Novorossiysk is particularly appealing. It includes the largest grain-export terminal in Russia’s major Black Sea port. Also included are several large regional elevators in Stavropol, Volgograd, and other major grain-producing regions.

• The ownership of AFM will most likely be structured to give the Ministry of Agriculture a 25% stake, while the remaining 75% of shares will be offered to commercial grain-trading companies. Preference will be given to Russian companies. The Ministry of Agriculture has already presented offers to Yug Rusi, OGO, and Siberian Agrarian Holding (SAHO).

• The media stated that the Ministry of Agriculture plans to make AFM Russia’s largest exporter of grain, responsible for 40% to 50% of grain exports in the next three to four years. At the same time, Russian grain exports are forecast to increase to between 25 and 30 million tonnes by 2011-2012. In MY 2007, Russia exported 12.7 million tonnes of grain, not including flour exports, of which 60% were controlled by six grain traders: International Grain Company, Agrika, Rosinteragroservice, Yugtranzitservice, Yug Rusi, and Aston. Smaller Russian grain traders and international grain-trading companies exported the remaining 40%.

Most private Russian grain-trading companies have declined to comment on the plan, in part because it is not yet a done deal, the FAS noted. The transformation of Russia’s grain trade will only occur if the Russian government chooses to identify grain trade as fulfilling a special role in the Russian economy. Otherwise, it will be difficult to prove the necessity of financing the quasi-commercial AFM and amending federal anti-trust laws to create an exception to the general ban on monopolies for this special case."
http://www.world-grain.com/news/daily_enews.asp?ArticleID=95390

[parsley]

Some excerpts from an article tiltled, "Canada's role at the WTO" written by Terence Corcoran, in the Financial Post, published: Wednesday, July 30, 2008 says:

"With the collapse of the Doha Round of trade talks in Geneva, the World Finger-pointing Organization (WFO) is now set to take over the trade agenda. China blames the United States, the U. S. blames China, India blames Europe, small nations blame big ones and big ones blame the small. Canada didn't blame anyone in particular for the failure of the talks, in part because it had no one to blame but itself."


"Far too much protectionist baggage was piling up on the negotiating table, from China's request for the absolute right to impose tariffs to the U. S. insistence on the right to subsidize agriculture and, most pathetic of all, to Canada's sly early carve-out of farm product supply management as a sacred "sensitive" category that could not be touched."


"Canada's defense of its farm protection monster is indefensible."

"Supply management -- a genuine monopoly rip-off of all Canadian consumers, an assault on sound economic principle and a tool of economic oppression -- remains the driving force behind Canada's current trade policy. It is Canada's trade policy."


quote
In March of 2007, Chuck Strahl, then agriculture minister, declared:
"Canada's new government demonstrates its support for supply management." As the Doha talks crashed yesterday in Geneva, International Trade Minister Michael Fortier said: "Our position on supply management will not change. Our position has been known for some time. And we have no intention of changing that position." unquote

"That ministers in the Conservative government of all of Canada can hold such positions openly is a testament to the aggressive farm lobby takeover of Canadian trade policy."

" The supply management protection program is becoming even more deeply entrenched as Canadian trade principle.
All Canadians should note that supply management is not just a policy. It is a government sanctioned monopoly. And not a monopoly in the flabby way that Canadians throw around the word monopoly, as in Bell Canada or Rogers being a monopoly. This is a monopoly with total economic control over everything it does. It makes its own laws and regulations, a state within a state."

Corcoran goes on to say

QUOTE
A recent Quebec government commission minced no words. "A marketing board is a monopoly with broad powers to intervene in the sale and marketing of agricultural products." Such boards, moreover, have regulatory powers, described as "unilateral decision-making tools with the same weight as an act of parliament."

UNQUOTE

"The results of the supply management system, maintained by Ottawa by force, are indescribably destructive. In the dairy sector, milk prices are kept well above international prices, Canadian milk and dairy product consumption is in constant morbid decline, exports are non-existent and vast pools of debt and waste are built around quota ownership."


"The real barometer of supply management is the price of the official monopoly quota, the right to milk a cow. The June price in Ontario was $33,235, up from $26,000 in June of last year. Meanwhile, the price of milk is going up September 1 -- a "special increase" to cover rising costs. Ottawa supports all this, right to the point of helping to destroy a trade agreement."

Parsley

[parsley]

Quote

Doha collapse to cost farmers $10M daily

Canada's position on supply mangement no help: CAFTA

by Paul Vieira, Financial Post Thursday, July 31, 2008

OTTAWA - Canadian farm producers not covered by supply management boards said yesterday the collapse of the WTO's Doha round talks will cost them close to $10-million a day in lost potential sales, or $3.65-billion a year.

Meanwhile, they add that Canada's position at the Doha talks -- that the country's supply management boards were to remain untouched as part of any trade liberalization talks -- did not aid their case in trying to gain access to new global markets.

The Canadian Agri-Food Trade Alliance said that the pursuit of bilateral deals, as advocated by Michael Fortier, the International Trade Minister, in reaction to collapse of Doha talks, are a "poor substitute" for a significant multilateral trade deals.

Those talks, aimed at freer trade to help poorer countries and focused mostly on agriculture, appeared to collapse on Tuesday after nine days of negotiations.

The Doha round kicked off in the Qatar capital in 2001, but progress in reaching a deal has been limited due to disagreements between the industrialized and developing countries on agriculture tariffs and subsidies.

CAFTA said the failure to reach a deal comes at a bad time, as Canadian exporters, such as farmers, must deal with the strength of the Canadian dollar.

"Bilateral agreements don't address domestic support payments and export subsidies, the real culprits robbing Canadian farmers of potential export markets," CAFTA said in a statement, adding bilateral deals cannot "substitute" for a new WTO agreement.

Canadian officials have also been under scrutiny for their role, or lack thereof, at the Doha talks in Geneva. Their insistence that supply-management boards be left intact likely shut Canada out from any meaningful role, analysts say.
Darcy Davis, CAFTA's president, said in an interview Canada's defence of supply management likely hampered his members' efforts to get greater market access.

"Ultimately, sensitive products weren't the straw that broke the camel's back, but they were definitely a factor in the talks not being successful," he said from Geneva.

"When we were trying to get market access elsewhere in countries that weren't willing to move, they found an ally in the Canadian government. This is always a concern to us."

Mr. Fortier said Canada's supply-management scheme was never addressed among the key negotiating countries during the Geneva talks.

pvieira@nationalpost.com
UNQUOTE


Parsely

[mcfarms]

Tom somewhat back on topic

. and to make people howl.


Maybe I shoud run for the board this fall Having among other things in my platform the concept of having the CWB enter a joint technical and sales agreement with the Russians new STE thus creating something I spoke to then Chairman Ritter about likely 6-8 years ago. Which at that time was a privatisation of the CWB and then a merger with the then pre-self destructed AWB. I liked the idea of similair crops but spread out production cycles and production/ quality risk.
Biggest disservice IMO the board has done for us ( among others) has been the year over year failure to think like a business and increase market share and market power. This move would allow us to do both with one fell swoop.

I will sit back now and recieve the accolades of all ( accolades meaning abuse)

You have to admit it's a interesting idea though.

[parsley]

And then there are the farmers on the Prairies who are unable to understand the value of Western Canadian farmers getting access to sell into global markets.

QUOTE
StarPhoenix

31 July 2008
Angela Hall

WTO failure good news: NFU; Collapse of talks leaves wheat board's fate in Canada's hands


REGINA -- Western farmers dependent on export markets stand to lose out from this week's collapse of World Trade Organization talks, some producer groups say.

But the Saskatoon-based National Farmers Union suggests the stalled negotiations toward a global trade deal may be for the best. NFU president Stewart Wells said he's concerned the talks could have forced an end to the Canadian Wheat Board's monopoly on international sales of western wheat and barley.

The NFU also expressed concern over what it called "increasing pressure" on Canada's supply management agencies at the WTO negotiations. Supply management affects dairy, egg and poultry producers. "If concluding a successful deal at WTO means Canada giving away the farm, then I'm glad it failed," Wells said.

However, the Western Canadian Wheat Growers Association says farmers who depend on access to world markets needed a deal that boosts their access to current markets and opens up new ones.

Association chair Mike Bast, who farms in Manitoba, said the annual value to agricultural exporters of lost potential sales is in the billions.

The recent WTO talks in Geneva were the latest in a round of trade negotiations that began in 2001.

The Canadian Agri-Food Trade Alliance, a group that also wants more trade liberalization, said it was "bitterly disappointed" at the outcome.

Bilateral agreements -- agreements between countries that Canada's foreign Trade Minister Michael Fortier says Canada will be pursuing -- may help, but they are no substitute for a WTO trade agreement covering everyone, said CAFTA president Darcy Davis in a news release. "Bilateral agreements don't address domestic support payments and export subsidies, the real culprits robbing Canadian farmers of potential export markets," Davis said.

Davis has also said Canada's position that the country's supply management boards remain untouched didn't help the country's case in trying to gain access to new global markets. "Ultimately, sensitive products weren't the straw that broke the camel's back, but they were definitely a factor in the talks not being successful," he said from Geneva.

Fortier has said Canada's supply management scheme was never discussed among the key negotiating countries during the Geneva talks.

Meanwhile, Canadian Wheat Board chair Larry Hill said he was pleased the federal government appeared to stand behind its position that only Canada should decide the future of the CWB's marketing monopoly, rather than countries at the WTO.

Hill said he's disappointed a deal couldn't be reached that would "level the field" for Canadian farmers. But he added that adequate subsidy reductions from the U.S. or European Union and meaningful market access improvements didn't appear to be on the table.

As the fate of the WTO talks remains up in the air, Hill said he would welcome an emphasis on bilateral agreements with countries to give Canadian wheat better access into more markets.

Saskatchewan Agriculture Minister Bob Bjornerud, who was in Geneva last week, could not be reached for comment Wednesday.

Bjornerud had appeared to be somewhat at odds with the federal position on supply management, as he urged the government to protect the system but to also at least consider some changes if other gains could be made.
UNQUOTE



The NFU is pleased that Western farmers lose money from free-trading. When you look at them in full light, the NFU don't even dispute the fact that the CWB opens its' arms to IMPORTING grain into Canada. The NFU simply don't want their non-NFU neighbors to do well from EXPORTING grain.

The NFU are pleased Eastern farmers receive captive-buyer-monopolist money.

The NFU fight against DA farmers receiving money from the market place. Fight hard.

The NFU must have quietly signed up 50,000 new farmers to run their ads, campaigns, to stage protests, to travel constantly, to print banners, to write releases. And all for Eastern Canada.

It's well known that the WBGA and the WCWGA always struggle to make ends meet on farmer memberships.

A Western NFU organization,seemingly well-funded though, but supporting/applauding mainly Eastern Canadian interests is a curious combination, indeed.


Parsley

[parsley]

Should read free-trading collapse.

[jensend]

what does the wto have to do with free trade?