Canadian Wheat Board

[Vader]

You guys just don't get it. You spend most of your day to day lives buying stuff. You buy your pick up truck, your groceries, your long distance service provider, your farm fuel, your fertilizer, your combine, and on and on and on. In every one of these situations competition is good. It is good because you are the buyer.

On the flip side every corporate entity in the world secretly (some not so secretly) desire to eliminate competition and if at all possible to have a monopoly. Why is that? Because to them competition is a bad thing.

So you see competition in and of itself is not universally good. If you think that it is you had better take a course in Economics 100.

When it comes to farmers selling grain competion does only one thing. It drives down grain prices. I am not talking about the competition of grain companies buying your grain from you. That is the opposite side of the coin.

Perhaps where we differ is in your view as to whether the Canadian Wheat Board is a buyer of your grain or a seller of your grain. I quite understand that if you view the CWB as the buyer of your grain that you want competition. What you want is for the Canadian Wheat Board to be reduced to just another grain company out there buyer your wheat and barley. In this role they would be virtually powerless as they would be under-capitalized and completely without market power in the world of multi-national grain companies. Just look at the corporate consolidation going on in that sector. Our domestic grain companies are having great trouble surviving as the goliaths battle it out for market share. On that battlefield the CWB grain company would become completely insignificant and would have absolutely no ability to impact on the profitability of your farm.

On the other hand if you see the CWB as the seller of your grain as I do then the conclusion is also obvious. I do not want to see you competing against the CWB (me and my grain) to drive the price of both of our grain down to the benefit of our international customers. I want the CWB to set the price of grain sales to Japan, China, England, Italy and dozens of other countries and I don't want you competing with them, either directly or through your multi-national grain handler.

Competition is good for farmers when they are purchasers. Competition is bad for farmers when they are sellers.

Have I made myself clear?

[TOM4CWB]

Vader;

The stand you take is for simple minded people.

However, the world is complex, not simple and certainly not the experience of many who grow and sell many times over what you produce.

I hope you can be humble enough to listen to many who experience the exact opposite of what you state as "a fact".

Buyers do compete for a product, and do drive prices up. Take a look at auto fuel for one second. Please listen to folks with practical experience and common sense... they have life experiences that prove their point!

[Vader]

tom4cwb,

auto fuel is perceived to be in short supply so ... yes buyer competition is driving prices up.

Show me a situation where a commodity is in a perceived oversupply, and where buyer competition is driving up prices.

[agstar77]

Vader is right buyers only compete for products that they fear are in short supply. Witness the lineups for gas . If you can create the perception that food is scarce you can name your price. It is not in the interests of multinational grain to create shortages , they deal in volume, price doesn't matter. They will sell at whatever price is necessary to move volume and you know who will take the short end of the stick.

[wd9]

Vader, the thing that drives many of us up the wall is the way terms are used by the CWB but are not defined in the real world that way. I hate to get into this one, but there is too much frost to combine till lunch time anyways.

Monopoly: exclusive ownership through legal privilege, command of supply, or concerted action. A commodity controlled by one party.

If wheat was only sold in Canada, and Canada could not import from any other country, only selling Canadian farmers wheat, the CWB has the legal right to charge in pure monopolistic fashion whatever they want because they have a monopoly.

The reality is the CWB is just one of many sellers worldwide and carries no monopolistic power to sell. What producers receive is simply a dollar cost average of all the wheat produced in Western Canada, sold on the open market worldwide as is legislated.

Vader, you shouldn't confuse monopolistic pooling, or the legal right to sell all the Western Canada's wheat and malt barley production with that of a true and real world monopoly. I must say, the CWB spin doctors have always done a good job of this. The CWB doesn't even have a Canadian pooling monopoly as eastern Canada is not included.

If Canada was the only country in the world that produced wheat, and the CWB was the only "seller" of this wheat worldwide, then it would be a monopoly. The only monopolistic action in Western Canada is the pooling, not the pricing. That is a big difference.

True legalistic monopolies scarcely receive less money than an open market system. Sony and Phillips and the compact disk is more than proof enough. A portion of every CD produced and sold in the world S & P get a cut. The problem is the Western CWB is not a true monopoly and therefore is forced to simply be another seller, albeit a big one, its only perceived advantage.

[Vader]

wd9, I agree with you about the whole monopoly thing. I do not use that term in regard to the CWB. I know that people find it offensive and that the definition does not fit.

Western Canadian farmers (and the entire grain handling system) must strive to maintain a reputation for a highly differentiated quality product. When it comes to #1 milling wheat and durum we have that to a limited extent. Certainly other countries compete in that market but the supply can be somewhat limited. Hence there is an opportunity to extract a premium. The CWB acting as a single desk seller of this premium product does have the ability to maintain this premium pricing structure.

The CWB does not have a monopoly but they can influence prices in an upward direction. You could argue that they could also influence prices downward and this is true. The question to ask is what motivates the CWB sales department. Certainly they do not answer to shareholders, nor do they work on a quantifiable margin. The problem is the federal government involvement and producers distrust of the feds. If the CWB was completely delinked from the federal government, and there was no minster-in-charge, no spending approvals, no govenment appointees on the board, and the CWB was completely controlled by farmers, then there would be no other conclusion but that the CWB worked only in the producers interest to drive prices upward. The best intentions of the CWB can be to work in the farmers interest and this attitude can be drilled down throughout the organization but the proof is not there as long as the government is involved.

[silverback]

The problem is they do not have to answer to anyone Vader. There is never any proof of "extracting" premiums in the world market because you never have to show anyone how it was done. As a producer of a commodity, I am currently accepting that I would like to sell my raw material to someone that can process it into a higher value product. I accept the notion that if they want to make a profit from their process that is ok too. There is more than one company in this world that would like to purchase my product to reach that goal. The wheat boards limitation on my ability to find out who wants my product and then my ability to sell it is dead wrong. It is my grain, let me find a home for it. Get out of the way.

It's funny how lately whenever someone makes an excellent point about the abuse the CWB puts on western farmers, you are now spinning how it is the bad boys in Ottawa that need to go, not the board itself.

[parsley]

Good Morning nejar,

The CWB pays for goods and services.

Group I selling goods to the CWB consistently complain, nejar. The majority of Western Farmers who sell goods (grain) to the CWB, are very dissatisfied with the price they get.


Group II who supply services to the CWB seem well-satisfied. Grain companies claim they make the most money from Board grains. CWB Staff are in this category. As were the old content advisory Boards. Ever hear Harder or Nicholson complain? Flaman?

Some farmers who provide "expertise", directorships, advisory boards, etc. (services) have a regular, balanced supplemental-income ration from the CWB and they don't complain.


Observers who get free CWB trips and lodging to Winnipeg or Calgary rarely complain. Flaman, must have enjoyed his taste of per diems and free trips to Ottawa, because he even reversed his stance, and halted his court cases.


Group II service providers become obsessed with their status and so-called privilege, and they will squeal and grunt to defend the CWB so they can protect what they have gained. You can recognize them by their zeal of defense. Fanatical adherents with a purse full of money to lose, being fattened by a Minister at the voting trough, is what the CWB depends upon.


So if you wonder,if the stories, as you say, nejar, "of the CWB low ballin the price of grain around the world', are true, you only need to listen carefully to Group I, who supply goods, and realize NO high CWB prices are going into Group I bank accounts. Group I live by those accounts every bloody day.

Either the CWB is low-ballin or else the CWB is handing all that so-called cash to Group II.

Which group are you in nejar? Which group is Vader in?

Parsley

[rockhound]

Parsley I agree with you the people who defend the CWB the most all seem to be on the payroll.

[TOM4CWB]

Vader;

I try never to grow a "commodity", and truly the CWB has brain washed so many.

On one hand the CWB says they sell a special product; which creates a premium; which makes demand in a world of oversupplied plenty.

On the other hand:

The CWB blends specialty produce into a commodity that is no better than any other supplier's or Countries... in fact creating a opportunity to encourage the buying customer to bid the CWB's price down.

Reality is an interesting commodity:

Everyone has a corner staked out on the "truth" of their situation... and everyone is RIGHT! In their own minds!

And the essence of being a human being is... we all have the Right to be Right!


Except when it comes to the CWB Monopoly... then only Vaders of this world's reality counts inside Canada!

[parsley]

Comrade Tom4CWB.

I cannot reason with Vader. Neither can you. His vision of farming corresponds to:

http://www.communist-party.ca/

where they also try to entice you with :

"Communists have a proud history organizing the unorganized"

and

"we stand for unity"

and

"our recognition of the need for the Communists to always defend the independent role and character of the Communist Party"

The Communist pitch parallels Vader's comments in lakenheath's thread, where he says, , "Farmers have a lot of market power. Sadly it is not organized market power", etc.

Tom4CWB, you may as well spend your trying to reason with Fidel.

That kind of reasoning is exactly why so many people packed their bags and left their Communist thinking countries and came to Canada.

Parsley