Who Controls Grain Handling?

[Vader]

I see this in Kevin Hursh's newsletter.

"In a press release issued after the meeting, Murad Al-Katib, Vice-President of the CSCA and Program Director for the Transportation Committee, was clear about the seriousness of the problem when he said, "Without a doubt, Canada's inability to get to the customer on time is the single biggest threat to the Canadian Pulses and Special Crops industry. Our reputation as a reliable supplier has been damaged. It is time for action or we will not overcome this threat."

If the CWB loses its position of authority over Canadian Wheat and Barley they will be in he same position as the pulse growers when it comes to moving those crops to market. Today they have some authority in apportioning the business to the various grain handlers and transportation providers. With this authority they have instituted competitive tenders for the business of handling board grains.

In the new world of "dual marketing" the situation will be the exact opposite. The CWB will be forced to bid to the grain handlers for the use of their grain handling and transportation facilities. Those same grain handlers will be doing business with farmers for the exact same grains. That would lead one to conclude that tariffs charged for CWB grains could increase substantially compared to the same grain handled by the grain company.

The "value proposition" of the CWB would be eroded.

The port terminals would present the same difficulty. Which major grain company would allow the CWB competitive access to its facilities. Any board grain going through terminals would reduce the capacity of those facilities to handle the exact same grain being sourced by the owners in their country elevators system. Would they be reluctant to do this at all? Again the tariffs charged by the grain companies for "CWB" grain could rise substantially.

Would it be possible for the CWB to retreat to a position of handling just producer cars? Likely not. When was the last time anyone shipped a producer car of a non-board grain? It just doesn't happen. The owners of the grain terminals simply will not allow it because it takes volume away from their country elevator systems. Will those same grain companies allow the CWB to ship producer cars of "CWB" grain. Not likely!

The future of producer cars, short line railroads and the CWB is very uncertain.

It is very easy to propose a future without the CWB having a single desk mandate. It is much harder imagine what system will be put on the table as a replacement which will have the potential to add value for farmers.

I challenge those who continually post here promoting the dissolution of the CWB to gaze into their crystal balls and tell us what they see. How much more money will I make after the CWB is gone?

Rod Flaman
CWB Director
(a small and aging farmer from Edenwold, SK)

[furrowtickler]

Well Vader: just my opinion but, from what I have been observing from all the posts and from what is happening on my farm, can it possibly get worse?
Anyone on this forum read an artical in the last John Deere mag(Forum)? There is great artical on a group of wheat farmers from the Mid west States that are running there own wheat mill/flour and bakery thats is producing millions of $ worth of product.
Oppertunities like that could open the door to at least some future for ourselves and or children without a CWB buyback or a God forbid an open maket.

[agstar77]

One of the changes farmers should demand if dual marketing comes to pass, is opening of running rights on the CN/ CP rails. After all we should have freedom of choice if we wish to use someone other than CN or CP. Railbeds are no different than Roadbeds. Railways should be made to divest their rail network to a new company that does not own rolling stock. Also Large grain companies should be legislated to divest port grain handling facilities or the CWB should be given facilities by the Gov't, to allow it to compete. If you are going to have true competition in grain marketing, a number of other changes are needed which may be unpalatible to the new government.

[Jman]

It would be comforting to know that in a wide open market we could maintain some "government" controls in the system, such as port ownerships, running rights and freight caps. But I dont think this will happen. The grain and rail companies own these assests, and it should be up to them to dictate how much they charge for service. Wouldnt competetion in the open market ensure these companies will be able to provide services at the least cost possible?

If they cannot, and our costs contiune to escallate, commodity farming will have to evolve into something it isnt today? What that will be...who knows?

[parsley]

Could this be the same Kevin Hursh that writes for the Farm Credit Corporation newsletter? FCC is Government directed.

Who would pay the the writers of the FCC newsletter?

Parsley

[Incognito]

A politician thinks of the next election; a statesman thinks of the next generation. ~James Freeman Clarke

[Vader]

parsley, I really don't see the connection you are trying to make between FCC and a quote made by the Vice-President of the CSCA.

[charliep]

Parsley

The quote above (only one paragraph) is from a press release by the Canadian Special Crops Association and reflects their concerns about the impact of transportation/logistic issues on their businesses.

Perhaps an interesting question that comes out of the first post is not necessarily the final result but how the industry transitions to something different. Studies that I have read on Australia and the issues they have/are dealing with indicate the need for gradual/planned change. Regardless of the outcome Monday, the CWB will be forced to do things differently. The issues relate to a move from a highly regulartory environment to a more free flowing market oriented one. The solution will be in the value based partnerships the CWB can develop.

[parsley]

Oops,and apologies,

I carelessly read the the Murad Al-Katib, Vice-President quote and misread the "scare tactic" ramblings following it, as a running commentary by Hursh.

I have to repeat this to myself: If it reads like the CWB, if it looks like the CWB, if it smells like the CWB, then it likely is the CWB!

I wasn't thorough.

I guess I'm just too excited these days.

Parsley

[parsley]

Vader,
You ask....

"How much more money will I make after the CWB is gone?"

Interesting question.

Parsley

[cowman]

I guess I would have to ask: Was the CWB going somewhere? I don't think Stephen Harper ever said anything like that? He just said that he was going to end the single desk?
If the CWB has any real value, other than force to comply, why would anyone think it would dissappear? If it is a good market agency it will be able to survive and continue to operate successfully?
Am I being naive or something? The CWB has always said it is doing such a good job...why would losing a forced monopoly stop them from doing a superior job? Have farmers been listening to too much propaganda...about how a dual market would destroy the "best" marketers in the world?

[Incognito]

Vader:

Regardless of the outcome of the election on Monday...

Rightly or wrongly, before April 30, 2006, the WTO is going to come down hard on STE's and the supply managed sectors.

Australia's AWB has alienated itself from internal support and that leaves the CWB naked and alone in front of 149 other members.

Is there a Plan B if the CWB loses the monopoly?

Has there been the foresight at the CWB board table to look at alternatives, or is the all-or-nothing approach the only option?

What has the CWB Board of Directors done for the next generation of farmers since they have been elected?
Have they been politicians or statesman?

[Vader]

incognito,

When it comes to the single desk, it is all or nothing. In the nothing scenario the CWB will have to evolve to become a grain company or as I said in my opening post be at the complete mercy of its competitors.

How long will the CWB have to establish a capital base and acquire assets? Where will that capital base come from?

Obviously the money will have to come either from farmers, the government or private investors. How much and how long will it take for the CWB to be a viable option in an open market?

[silverback]

Maybe you should have been planning for the day that Western Canadians actually made a difference in this country and decided to make things work for themselves! Obviously you never thought the gravy train would end. This industry has been dying for years and according to you we should just keep doing the same thing. Well, either we do something different or we will just seed it all to grass. Maybe we should go organic and drive that price down? How would that strike ya?

[parsley]

Vader, when you say things like, "When it comes to the single desk, it is all or nothing", it is so silly, because you know full well that presently, all the EMFA feed grains bypass the single desk, Ontario's grain bypasses the single desk, registered seed bypasses the single desk, and on and on.

Thousands of bushels bypass the single desk.

You full well know the Board is only responsible for marketing what is OFFERED to it.

And so all or nothing is a your myth.

Getting back to your question, "How much more money will I make after the CWB is gone?"

I presume you are musing about a government job.

I presume you'll be hoping for a strong Liberal win in the election.

Parsley