something to think about

[TOM4CWB]

rbrunel;

Getting past the forest... but ignoring the trees on the way through... is not a smart move...

Hitting a mother tree at 100km while looking in another direction is not a smart thing to do.

This job must be broken into small chunks that can be done... a peice at a time.

First of all a full democratic election system must be imposed upon the NEW CWB CORP... with at the very least ONE physical person... one vote. Sadly we haven't even got this yet in our present CWB!

Next up is marketing... a change to allow a choice through a small but effective pressure relief system. We had this before 1993.

So my next stage is to issue export licenses, like we do in Ontario; to growers shipping in Containers or trucks. We must allow innovation to lead this sector to maturity... this, with the CWB's HELP... could make our marketing PIE bigger... not shrink it like CWB managers now envision.

With OUT these two steps being taken... the CWB is dead in the water. This transition can be done in a co-operative spirit... will we have the intelegence to manage change and do this?

Will we have the intellegence to implement the rest of the Western Grain Marketing Pannel Report Recomendations?

[Braveheart]

rbrunel, some of the things your're concerned about would easily adapt in an open market. For example, if a plant (or mill) phoned up and ordered a shipment of durum (your example) the specs required would be stated in the contract. The company supplying would take every quality assurance measure they could to ensure the shipment met the specs required. To not do so would cause loss of future business, reputation, or legal recourse. Normal commerce works this way.

The questions you pose are good ones however. The entire Can grain industry could change for the better without CWB domination. We currently have too many grades and segregations of wheat and barley, all created by and for the wheat board's sales "style". As a farmer I've always been concerned that this could and I'm sure does lead to over-delivering (on quality) to some customers. But, all these segregations also have a negative effect on terminal space at port, and railcar cycle times. This all leads to inefficient use of assets and trickles down to affect farmgate returns.

The commercial aspect of the open market vs. the command and control of the CWB in grain transportation and logistics management has been debated in the recent past and would certainly need to be dealt with again. The last round of Estey/Kroeger did little in the end to create any efficiencies because the CWB retained too large a role and a true commercial system was not allowed. Accountability is still nonexistent without lengthy and often unproductive lack of service complaint tribunals.

[northfarmer]

...on the issue of trade disputes, both dealing with interprovincial and international, we have elected govts and taxes we pay, it is not the CWB's responsibility and and should not be funded out of my grain sales, period!!!!

...you can look to the grading and transportation of non board commodities, even high volume ones like canola, there are grading standards, well known by growers and backed by the current CGC standards...etc.etc...we get canola cars in a much more predictable and reliable fashion than we get shiping for board wheat...no need to spread fear of change on these issues.....

...I personally think the current canola vartiety registration system to have its flaws but it seems to work better than the system we have in place for wheat and barley, to say the new varieties have not outperformed those of the past is ridiculous...plus it is not our money invested and lost on non performing varieties that are brought to the market by the privately owned breeding firms, and who is still growing ebony and bounty?we have many breeders doing lots of reaserch and trying to compete in a competitive market place for the deamnd of growers for variety options and improvements...

....reform of the CWB and marketing choice for designated areas is the start.....next the CGC, CIGI and others should and will get their turn if we are too improive the future for primary producers....

[chaffmeister]

rbrunel:

I looked at the questions document on the KAP website as you suggested. I applaud the effort to get farmers to ask appropriate questions and think critically about the issues. Although there are some very good questions, I feel some miss the mark somewhat and appear biased. I'll take a stab at a few......

Question: "When you market your crops throughout the crop year, will you be able to obtain premium prices from an open market?"

What is meant by 'premium' prices? Better than average? Better than someone else? Better than the 'market'? The question sounds like it assumes the CWB single desk gets premiums.

I think a better question is "Has the CWB been getting premiums?" Don't take the CWB's word on it - there is so much evidence out there that contradicts the CWB, force them to prove it.

Question: "Companies with market power retain more of the profits in a value chain relative to those who have little or no market power. As an individual marketer, does your farm have the market power to get a fair share of grain industry profits?"

I think a better question is "Has the CWB been successful in getting a fair share of grain industry profits?" And when answering, don't make the assumption that since it has single desk power, it MUST be. Trust me - it's not that simple. Ask the right questions - make them prove it.

Question: "Revenues from tendering and despatch are currently shared by all farmers. In an open market, how will farmers ensure they are receiving their fair share of supply chain efficiencies?"

Tendering "revenues" simply gets CWB costs closer to non-CWB levels. In an open market, the cost of handling wheat would be less than it is today. That's what competition does.

Question: "How will current value-added activities and growth be impacted by a move to the open market?"

You'd see a lot more. Trust me.

Question: "Given that the commercial elevator system can only hold 10% of the crop at any one time, what would your delivery opportunities be in an open market?"

Better than it is today - no contract calls restricting deliveries.

Question: "How would basis levels be affected if the CWB were no longer using contract calls to allocate access to the handling system?"

Basis would change the way its meant to - to attract grain when needed and to ration demand when its not.

Question: "Given that farmer-owned facilities do not themselves own port terminals, combined with the need to finance all inventories at commercial rates; can smaller companies remain viable in an open market?"

Why ask farmers this question? Ask Bill Parrish or Andrew Paterson. How do you think it works with non-CWB grains...

Question: "If Canadian grain truck movements to the U.S. increase in an open market, will there be more trade disputes with the U.S.?"

No. The US has an issue with the CWB - not Canadian wheat. Once the Canadian and US markets arbitrage freely, no more wheat will go south than is necessary - but you'll see US-equivalent prices domestically.

Question: "What’s the difference between the proposed new marketing entity and a commercial grain company?"

The new marketing entity won't (initially) operate facilities. It should see itself as a negotiating body representing farmers, not as a grain company.

Question: "Why would competitors move the proposed new marketing entity’s grain if they could move their own?"

To make money. They have serious excess capacity and grain handling is a high fixed cost / volume business. The more the merrier.

Question: "Often, there are comparisons made with the marketing systems in Ontario and Australia. Is this a relevant comparison?"

Yes.

[chaffmeister]

correction:
I wrote "Basis would change the way its meant to - to attract grain when needed and to ration demand when its not."

This should have said ...ration SUPPLY when its not.

[wd9]

rbrunel: re Ok, so the market is open, is there a need for continued funding to things like CIGI,

You already fund as a farmer CIGI and it is seperate and can continue like the CCC and canola. It is not mutually linked or exclusive to the CWB and would easily continue and run effectively.

re: who is going to replace the CWB in working on trade disputes.

Wow, where does one begin. CAFTA for one but what was more disturbing in Geneva was the CWB lobbying government saying no deal is the best deal. Exporting 80% of our product we produce into non parity on tarrifs and obscenely high tarriffed countries costs growers over a cool billion a year. Do you really think having the CWB say no to any trade resolution was the best answer for you as a farmer. Elmer Fudd lobbying on trade would be a drastic improvement.

As chaffmeister wrote in great deal and eloquence, don't follow the rhetoric, find out what you can with an open and business like mind. There is plenty of proof out there to make a business decision. Or just make a phylisophical decision and save yourself a bunch of research.

[rbrunel]

Hi folks

I am glad to see some of the comments posted on this. I was in Winnipeg yesterday of the MB chamber of commerce luncheon with Minister Strahl. In your comments I have heard more inteligent comments and openmindedness then alot that was said there. My fear is that we have polarized farmers more and no one is left with an open mind. I will not deny that I am a pro monopoly supporter. But one that is willing to look at the whole picture and move forward for the better. I applaud the constructive comments that were given.

[craig]

I would like to pose the question. How would the Fixed Price Contract or the Daily Price Contract fair( get used) in an open market environment.If the answer is it wouldn't get used, then the next question is if or how could it be changed so that would be used. .

[TOM4CWB]

Craig;

For growers who are loyal to the CWB... we would expect the NEW CWB to do the best it could.

Not at all like CWB Management does today. Measner must be fired before he totally destroys the growers good will towards the CWB.

I am having calls from growers who NEVER would have... even 3 months ago... questioned CWB motives.

THe fact that 20,000 growers are using... and watching FPC and DPC's... proves the COnservative plan has already worked.

THe growers have awakened to the fact that the CWB are stealing from PPO's and padding the pooling accounts.

On your question in a new CWB;

We buy a large % of supplies from UFA. But not all supplies... We will buy from line co's, Independants... to be sure we have a choice into the future.

The same will go for the CWB in the future.

I need a choice... and competition to get the best deal possible for our families farm. Inputs are no different from marketing services.


We are called to Judge the FRUIT... if the actions don't match the claims...

All it is, is another telemarketer calling!

[chaffmeister]

Craig - I doubt that the current CWB PPO contracts (FPC, etc) would be used - too complicated and not viable in a competitive environment.

In a previous thread I described a basis idea for the CWB in detail - someone recently told me I get too "complex" so I'll make it less complex this time.

The CWB's initial payment on pooled grain could be based on a fixed basis (initial basis, or pooled basis). Grain would be priced at the farmer's discretion (just like a basis contract on canola - the difference is that here, there would be a final payment). The CWB would manage basis risk by offering an initial basis - fixed for the year; flat price risk would be for the farmer to manage based on his own risk appetite.

At the end of the crop year (or pool period), the CWB would pay a final payment based on profits made beyond the initial basis level.

Any futures rally (like the one we've seen this year) would directly impact farm prices on CWB grains - no lag, no dilution, no profits held back and shifted around.

There would be no need for all the complicated CWB contracts based on the PRO - there wouldn't be a PRO - except maybe to say what the final pooled basis might be (initial basis plus final payment).