Wheat Duties

[charliep]

Interesting question by Parsley. Canada has
imported far more US corn than exported feed or
malt barley. The US has never had a trade action
on barley (except on the cattle action when they
argued the Canadian government used the CWB as
a methodology to keep feed barley cheap in
western Canada).

I note the $100 mln (or whatever). If the US gives
this money back (I note the expression IF), what
should be done with it?

1) Put into general revenue by the federal
government?

2) Held outside the CWB and instead invested in
something that will benefit the grain industry
(research and development, market development,
etc). Decision could be made by the federal
government, a combination of industry and
government or industry.

3) Given back to the CWB to redistribute among
farmers who delivered grain into the 2003/04 to
2006/07 pooling years.

4) Given to the CWB to be deposited into the
2008/09 (maybe some 2007/08) pooling accounts.

5) Given to the CWB to be deposited into the
contingency fund.

[Fransisco]

Oh yes I keep forgetting wheat in Western Canada is somehow magically different from every other grain and is different than wheat from anywhere else in the world.

It is exactly like pigs, right up until someone points out that all the former hog monopolies in Canada are doing just fine thank-you very much.

Then it goes back to being different than everything else in the world again.

Sorry, that dog don't hunt.

[parsley]

The topic is duties, and I want to make a comment about the Canadian Wheat Board duty.

When the CWB Act was passed in Parliament in 1947, one particular section of the CWB Act pertained to a collecting a national duty. The legislators referred to it as a national tarriff. This duty section of the Act applied to all exports and imports, of wheat and feed grains and flax.

This duty applied to all importing and exporting regions of the country.

This duty is described in the part of the Act that the CWB has now nicknaned "the buyback" 46(d)/14(b)

This is what has taken place while we snoozed....The Wheat Board has transformed an Act of Parliament from being a national tarriff requirement, to being a regional tax against Westerners, and all of it was accomplished by talking fast and laying low, and doing it by spending your dollar.

And the CWB have done it without shame, and without guilt.

Wheat duties are supposed to be national.

According to the constitution, the Government of Canada cannot impose a national tax upon only ONE region of the country.

Parsley

[vvalk]

The problem the americans have with the CWB is that american companies have to buy and pay for the wheat at the same time they sell it. They make a margin. Their selling price is set by what they can buy it for. The CWB can come in and sell at whatever price it takes to get the sale. ( usually at a discount ) Then they pay the farmer up 18 months later. CWB supporters try to take the religious side of this aside. Just think about it. If you sold widgets for $5. If your competition (CWB) came in and sold them for $6, why would you slap a law suit on them? You would sell out of your widgets before they sold one. There would be a problem though when you pay $4.50 for your widget and sell them for $5 and the CWB pays $2 up front comes in and sell them for $4.75 and has over a year to pay the $2.75 to its suppliers.

[TOM4CWB]

Grainbeetle... you said:

"The amount of CDN Peas exported to the US is also to small start a trade challenge."

Ever wonder why?

Could it be that in an efficient effective marketing system... lower western Canadian handle charges mean that the best way to the export market... is off the west/east coast of Canada... IF we could be consistent shippers!

And since peas are non-board... guess what!

There is virtually no pressure to ship south of the 49th... because... we have the same basic marketing system... with transparency.

Obviously this is not the case with wheat!

Canola is WORTH MORE in Canada than in the US... because it to is non-board.

Even flax works its way through... without inter border pressures!

Oats are grown here... and shipped south... because US growers have a higher cost of production... and a transparent market will allocate resources to the most effective producers... once again proving peas, canola, oats, flax, and other non-board grains trade freely... because we use the same system of transparent marketing!

We would appreciate the opportunity to achieve US prices... and BETTER... in Canada for Wheat, Durum, and Barley...just like we do for Canola... as well!

[GrainBeetle]

Parsley, I don't think there is a sizable market for CDN feed barley in the USA as corn and soy/meal are there primary feedstocks.

Now as for subsidized US corn coming into Canada, that is a different story.

As I recall a couple of years ago, the MB Corn Growers fought US subsidized imports into Canada and won, resulting in a huge tarriff placed on US corn.

This immediately caused CDN Corn,feed barley and feed wheat farmer bids to go up in in W. Canada. But the Franny's of the world did not support this action,as it increased the price of their pigfood.

They instead helped the US farmers in removing the tarrif, that resulted in our feed grain prices to drop once again.

Thanks Franny, you are a "Great (Wannabe) American", as your favorite talk show host Mark Levine would say.

[parsley]

Grainbeetle,

An obcene amount of our feed barley is exported to the United Staes, but it enters, tarrif free, and buyback free, under the Export Manufactured Feed Agreement that the CWB originally arranged secretly to accomodate large corporations grinding feed and shipping it into the USA.

Would you agree to the barley and wheat first being sold to the CWB, and then bought back again by the feed companies before it can be exported as feed?

The change would mean two things:

First of all, the CWB, according to your theory, be able to squeeze more money out of the feed companies than pissy-Parsley would be able to negotiate.

Secondly, the barley pools would enliven with all the barley passing through them.

What do you say, Grainbeetle? Are you game for the CWB to both pool and market feed wheat and feed barley once again?

Parsley

[charliep]

GrainBeatle

Since you mentioned corn countervail, I thought I should toss up the facts. From
Bimonthly, AAFC market analysis branch. Don't see livestock industry but rather the
inability to show damage.

Quote:

CORN COUNTERVAIL DUTY
On July 10, 2000, the Manitoba Corn Growers Association filed a complaint alleging
injurious dumping and subsidization of imports of grain corn from the US. The complaint
was limited to imports into Canada west of the Ontario-Manitoba border and involved
about $50 million in imports over the period in question.

The Canadian International Trade Tribunal (CITT) determined on October 10, 2000, that the
evidence presented was a reasonable indication that the dumped and subsidized grain corn
from the US caused injury to the domestic industry.

On November 7, 2000, the Canada Customs and Revenue Agency (CCRA) made a
preliminary determination that grain corn imported from the US into western Canada has
been dumped at prices that were, on average, US$1.01/bu below profitable levels and that
US corn was subsidized by, on average, US$0.57/bu. Accordingly, a provisional countervail
duty of US$1.58/bu was applied to grain corn imported from the US for destinations west
of the Manitoba/Ontario border.

In the CCRA’s preliminary investigation it was determined that the following US farm
programs constitute actionable subsidies: (a) loan deficiency and marketing assistance
loans; (b) marketing loss assistance payments; and (c) federal crop insurance programs.

The finding required proof that: (1) there was a concentration of US corn into the regional
market; and (2) that the dumping or subsidization of corn causes injury or retardation or is
threatening to cause injury to the producers of all or almost all of the grain corn produced
in the regional market.

On March 7, 2001 a CITT inquiry found that a substantial proportion of locally produced
corn did not enter the regional commercial market and thus was not injured by the dumped
and subsidized US corn. The CITT concluded that the minimum injury threshold was not
met and therefore the provisional duty was rescinded."

End quote.