Dual Markets and Plebiscites

[chaffmeister]

On another thread past plebiscites were discussed. Here’s the dope on the two most prominent ones on barley and the most recent CWB survey (May 2006):

November 1995; Alberta government plebiscite on barley (and wheat)
Barley Question: “Are you in favour of having the freedom to sell your barley to any buyer, including the Canadian Wheat Board, into domestic and export markets? Yes or No.”
Result: 65% said yes.

March 1997; Federal government barley plebiscite
Question: There were two questions on the ballot:
Open Market Option
Remove all barley (both feed and malting/food) from the Canadian Wheat Board and place it entirely on the open market for all domestic and export sales. OR
Single-Seller Option
Maintain the Canadian Wheat Board as the single-seller for all barley (both feed and malting/food) with the continuing exception of feed barley sold domestically.
Result:
Votes for Open Market Option: 37.1%
Votes for Single-Seller Option: 62.9%

May 2006; CWB producer survey
Question One:
If you had to choose between three different approaches to marketing barley, which of the following would you prefer?
1. That barley marketing, for export and domestic human consumption, remain the sole responsibility of the Canadian Wheat Board.
2. The dual marketing option, where private companies and individual farmers could compete with the CWB for barley sales in the domestic and export market.
3. That there be a totally open market for barley without the Canadian Wheat Board.
Results:
1. (Status quo) 29%
2. (dual market) 46%
3. (open market – no CWB) 19%

Question Two:
If you had to choose between two different approaches to marketing barley, which of the following would you prefer?
1. That barley marketing, for export and domestic human consumption, remain the sole responsibility of the Canadian Wheat Board.
2. That there be a totally open market for barley without the Canadian Wheat Board.
Would you support that option strongly or just somewhat?
Results:
Strongly sole CWB……32%
Somewhat sole CWB…….13%
Somewhat open market……20%
Strongly open market……25%


To sum up:
When forced to choose between the CWB and no CWB at all, CWB support topped out at 63% in 1997 but more recently appears to be 45%.
BUT - mention “dual market”, and support for the CWB (status quo) is 29% (according to the May 2006 CWB survey; also consistent with the 1995 Alberta vote).

The CWB amd its supporters say it’s impossible for the CWB to operate in a dual market. I believe this position has been based solely on results of past plebiscites and – more importantly – CWB surveys that show that when farmers are asked about a “dual market” for barley, a majority of them like the idea. So the CWB has done everything to get “dual market” out of the discussion. And they’ve done a good job of it; even open market supporters are now saying, “Fine – no dual market. What we need is a market where we have choice between anyone including the CWB. And we’d like to see a strong CWB.” Now the CWB supporters are attacking the concept of a strong CWB in an open market.

But it seems to me, that the Western Canadian feed barley market is – and has been for some time – a dual market. You have a choice – sell your barley locally or sell to the CWB for export or malt. Charliep and others indicated the same thing recently in another thread.

So here are the questions for CWB supporters:

1.....In your opinion, does the CWB perform well in the feed barley market? If so, explain. If not, explain.

2.....In your opinion, does the CWB perform well in the malt barley market? If so, explain. If not, explain.

3.....If we assume that you’re right that the CWB couldn’t operate successfully in a dual market, is it safe to say that the CWB can’t be effective in the barley market?

4.....And if so, why keep barley under the CWB?

[craig]

Chaffmeister Since we can't have a dual market and we must be specific in the question we have then maybe the question should be. Choose between the following. All barley including feed to be marketed through the CWB. All barley to be marketed through an open market system. If CWB supporters claim it is all or nothing then maybe that's what the question should be.

[chaffmeister]

My feeling is that if we can't (I hate saying "can't"....) use the term "dual market", then the question should indicate "choice", which would include the CWB.

[TOM4CWB]

Chaffmeister,

I watched John Prentice give his presentation in 1998 to the Senate on the changes to the CWB Act.

Since the "contingency fund" was in the discussion... he made it VERY pointed that livestock producers:

1. Expected the CWB to keep a supply of barley locked into western Canada,

2. That the CWB not use funds from the contingency fund, and interest earnings for a second example, to drive up feed barley prices, and

3. The CWB stay out of the domestic feed barley market.

THese are all non-specified regulatory parameters that the CWB uses when marketing barley.

The CWB has clearly accomodated, if not encouraged, stock swaps between their agents and themselves... for the benefit of the agents and themselves... in a manner that is not transparent to grain growers.

To say we have a dual market in domestic feed barley is really stretching it... a long long way. The Agents of the Board can stock switch barley back to the domestic market... but does the CWB actually sell into the domestic feed market?
Except in special circumstances the CWB won't as a matter of practice... the same for feed wheat.

I believe the CWB managers would call this part of the "orderly marketing" mandate the CWB is to fulfill.

DO these policies "maximise" feed grain returns for "designated area" barley and wheat growers?

How can we even know... when it is a non-transparent system between the CWB and it's agents... that I believe practice would prove the agents control and profit from.

I recall comments from agents about these stock swaps leaving massive short positions by agents of feed barley to the CWB... what can we see of past trading back and forth... and what were the values used for the swaps?

THis situation is not functional or fair to growers.

Agents of the CWB are; at the total mercy of the CWB...

The power of the CWB is both market distorting and potentially destructive... or very sweet... for the Agent in individual circumstances.

Is this a "good" feed marketing system... that "maximised" our returns and grain growers?

Ken Beswick resigned because it was costing us hundreds of millions in the feed barley market alone. Few would argue that this would also not skew the malt barley market down... on a global basis... as well!

2006-07 human consumption barley prices would appear to be substantially lower than a normal competitive market would dictate... wouldn't they?

[wilagro]

chaff: Thanks for posting the results of the different surveys relating to barley and wheat marketing choices.

In a previous posting I was refering to this one in which I participated.

March 1997; Federal government barley plebiscite
Question: There were two questions on the ballot:
Open Market Option
Remove all barley (both feed and malting/food) from the Canadian Wheat Board and place it entirely on the open market for all domestic and export sales. OR
Single-Seller Option
Maintain the Canadian Wheat Board as the single-seller for all barley (both feed and malting/food) with the continuing exception of feed barley sold domestically.
Result:
Votes for Open Market Option: 37.1%
Votes for Single-Seller Option: 62.9%

As far as the other surveys...interesting was the skewed Alberta survey results which contained IMO the 'tricky' questions designed to get a 'desired' response. The AB gov't was criticized for clouding the issue with its pre-survey propaganda as well.

As far as your 'new' questions are concerned...I choose not to reply at this time. Time for my nap.

Cheers

[chaffmeister]

“Are you in favour of having the freedom to sell your barley to any buyer, including the Canadian Wheat Board, into domestic and export markets? Yes or No.”

THIS is a "tricky" question? You gotta be kidding!!

Interesting you chose to NOT comment about the most recent CWB survey that shows only minor support for the status quo.

I'll assume my questions were too tricky for you. Forget about the "explain" part - just a yes/no would be great.

[wilagro]

chafmeister: You are labouring under a delusion that CWB supporters WANT your grain to mix with THEIRS. The CWB user has no say in this. The LAW requires you to sell CERTAIN grains through the CWB. If you have a quarrel with this, take it up with your stupid politicians or the CWB or the man in the moon, for all that I care. Why should I or any other CWB supporter have to answer your questions anyway. WE may be the "enlightened", but we are not the CWB.

[silverback]

Why?

Because supporters of the status quo keep telling others to leave things the way they are!

If the supporters of the cwb don't want non-supporters grain mixed with theirs, why are they stopping them from being able to sell their grain the way they want? or to who they want without penalties ?

[chaffmeister]

Wilagro: Afraid you’re confusing me with someone else – perhaps from another thread. I have never commented on anyone wanting to MIX their grain with others.

As for my questions – you’re right; you don’t have to answer them if you don’t want to. But I have to admit I really don’t get what you are saying – “WE may be the "enlightened", but we are not the CWB.” What does that mean? Are you saying that you are a “believer” but can’t say whether the CWB is performing well or not – because you’re not the CWB?

In the spirit of this debate, shouldn’t we all KNOW whether the CWB is doing a good job? And doesn’t that start with the guys tilling the soil? And if you are “enlightened”, wouldn’t it make sense – in the spirit of the debate – to share?

If you don’t know how or why the CWB is a good thing, but you support it anyway, we’re back to a case of blind faith. That may work for you but I’m gonna stick my neck out and suggest that it sure don’t work for most businesses. When you’re being asked serious business questions, you need serious business answers.

And the CWB won’t give us that.