Corner&Conquer

[cottonpicken]

For some damn reason i found myself thinking about the cwb and before i could push it out of my mind with another beer i thought...
What if...
The specialty crop farmers really did come together in western canada.Dont we control HUGE percentages of many smaller things.We could never control the world price of wheat but canary?Or one of the other dozen or so?Volantary of course.
These thoughts are very influenced by the previous lentil thread where even tom would be game by a volantary pool.
I am 100% positive this happens in other "things",could this happen with us,I'm 93% sure it wont but its fun to speculate.
Go ahead and poke sum holes i see lots.

[agmaster13]

Any board, voluntary or mandatory, that hopes to increase the price of the product it represents needs to be able to regulate the supply of the crop in order to see price gains.

Price gains from reducing the supply of the crop in a voluntary environment will quickly be erased by free riders. In this type of environment farmers who are not involved have an incentive to produce and sell into the market in which the price has been artificially increased.

Thus, in this scheme the producers outside of the board will benefit more those involved with the board.

See "Farmers for Sabbatical" for another example of why voluntary supply controlling marketing boards will not work because of this free rider problem.

[TOM4CWB]

Agmaster13,

Contract law changes the free rider theory. Grower groups in specialty herbs and medicinals prove it can work and work well. Just don't belong to the marketing group with the contract... and try to sell your product! Ouch... No sane person would call it a free ride when a 50% discount is applied because the produce was not contracted!

In very limited produce crops/markets... contracted production contracts work extremely well if everyone lives up to the contracts with integrety!

[agmaster13]

The small acreage and grower numbers involved in the specialty herb market contribute to the success of marketing groups in these industries. What is more important though is the buying structure; generally there is only one buyer of the product that would have exclusive agreements with the marketing board. In this case your contract law assumption holds.

But, in order to make an inference ti is important to examine where our specialty crops are being sold. Some are processed domestically but the majority are exported by many different buyers to many different sellers. You simply can not compare the success of herb marketing boards with this type of environment.

[parsley]

agmaster13,

We know there is no single desk for wheat/barley in Canada, and yet, the CWB, and U of S economists insist the CWB gets top dollar.

Example #1. The Creston-Wyndell region not only bypassed CWB marketing and pooling for many years, but actually legislatively ceceded from the Designated Area in 1998. All done with the CWB's blessing.

In spite of this, U of S economists claim the board gets top dollars.

Example #2 Ontario and Quebec operate outside the DA.

Yet U of S economists claim the board gets top dollars.

Example #3 Feed mills buy feed wh/bly and operate outside the so-called CWB single desk. All done with the CWB's blessing.

Yet the U of S economists claim the board gets top dollars.

Hmm. There's a pattern here.... There is no single desk in Canada, yet the CWB and U of S econs still claim the single desk gets the most $$$.

Agmaster13, yet you say, "the producers outside of the board will benefit more those involved with the board."

You are essentially saying Creston farmers and Ont/Quebec farmers get more benefit than the CWB can get.

Seems a good reason for farmers to get rid of the CWB.

Parsley

[TOM4CWB]

Agmaster13,

Despite what the CWB "single deskers" say, many endusers know, that to have a long term stable supply of the produce they need; a fair price must be paid that is profitable for growers to include in their rotation.

THe "free riders" as you call them... who speculate without contracting... are then a seperate group that often is a fill in supply and at the mercy of very aggressive price discounting tactics. This is more the rule than the exception.

In many markets substitution for a slightly different product is possible... so the "corner & conquer" attitude 7 TACTIC simply will not work.

[cottonpicken]

You control the supply you control the price.One company controls the vast majority of diamonds.Do they not benefit?The theory is sound.
It wont work because you cant get a group of farmers to work together.

[craig]

Even if you get farmer's together you don't have a corner on agricultural products. Push prices too high and you invite more competition and tick your customer off. Just because we are major suppliers of some crops doesn't mean other countries can't produce the same. A lot of pea genetics grown in Canada orginate in Euorpe. While OPEC has been successful for a number of years it is now spurring on alternative fuels. We all seem to be chasing this utopia that we can produce something an charge a fortune for it. Unless you can get a patent it isn't likely going to happen.

[agmaster13]

I find it interesting how most threads on this site get spun in the CWB direction.

If you aggregate both CP's comments and craigs you see my point. There will be a benefit for a large diamond producer (lentil producer) to shift the supply curve in order to get to a higher point on the demand curve (CP's point). However, the benefit will be greater for other diamond producers (lentil producers both inside and outside Canada) because they will not have to short their supply and will be able to sell at the higher price (craigs).

On a final not supply management in Canada only works because there import tariffs/restrictions on the supply managed commodities.

[parsley]

agmaster 13,

Any thread that begins "For some damn reason i found myself thinking about the cwb...." invites CWB dialogue.

Your economic wizardry leaves me so breathless and so in awe, and seeingst you are so good at it, could you pretty-please aggregate the questions from all those farmers who have consistently and repetitively asked you know, the big-one:

"If the single desk is so effective and gets so much money, where can the farmer find that money?"

That's our point.

Parsley

[agmaster13]

"If the single desk is so effective and gets so much money, where can the farmer find that money?"

Never in any of my posts did I ever argue that the single desk is effective or beneficial.

I was only trying to point out that managing supply of a commodity with a marketing board will not happen unless you can stop others from selling the same commodity into the market.

[parsley]

agstar13,

Reading your posts, I would never presume you owned this argument.

The argument is owned by farmers who are opposed to the single desk. It can include you if you would like, though.

I simply asked you to aggregrate the questions of those 'choice farmers' who have untiringly asked the same question again and again and again.
BTW, here it is again, if you missed it:

"If the single desk is so effective and gets so much money, where can the farmer find that money?"

You missed both points.

Parsley

[agmaster13]

I think that your (everyones) question has never been answered to any degree of satisfaction is because it simply can't be answered because all farmers are different.

All of the work that has been done on the single desk (both for and against) assumes that all farmers are the same (homogeneous). Which we all know is incorrect, but in order to draw any inferences at all it is an assumption that is still used. This assumption skews the results of both bodies of work.

Is it effective? I think it may be effective for some farmers and for others it clearly is not. Whether or not minority rights should trump majority rule is why it is such a contensious issue in the first place.

[parsley]

You've just said (very eloquently, I might add)that because economists have adopted, and continues to employ methodology that skews results, they do not do studies on farmers' returns.

I presume the CWB's U os S studies should all be put in the old biffy.

Parsley