An open question for CWB supporters (related to Charlie's question #1):
The $59 million “benefit” the CWB supposedly brings is the difference in weighted average prices by destination. The study showed that sales to Japan were - on average - higher than sales to the US and the rest of the world, and sales to the US were higher than sales to the rest of the world (but lower than those to Japan). The authors assumed that these price differences were due to the CWB using its “market power” to price discriminate and that the price differences would not be evident in a “multiple seller market”. Therefore, the average annual “benefit” of the single desk was calculated to be $59 million over what a “multiple sellers market” would achieve.
Here’s the question:
If you were able to do the same calculations with all the canola sales made by every exporter in a year – producing weighted average prices to Japan, China, Mexico, USA and Canada – do you think the results would show that Japan consistently pays higher prices than China and Mexico? (Just as the U of S study showed on barley.)
Think about it. China – if it buys Canadian canola at all – tends to buy in the fall / early winter, when prices are seasonably low. Mexico will buy any time of the year, but also only when prices are low. Japan, on the other hand, buys year-round, regardless of how high the price goes.
I’ll tell you what I think. I’m certain that the results the U of S found on barley would also apply to canola – it would show Japan pays more than others for canola, year-in, year-out. And, in a “multiple seller environment”. It doesn’t take a single-desk to make this happen. The U of S study does not prove the CWB brings any benefit over a “multiple seller environment”.
Now to your answers:
If you answer, “Yes – the same would apply / could apply to canola”, then think about what the CWB’s single desk benefit really is. If the same can happen in the canola market as found in the barley market (different buyers/destinations providing different returns), then the U of S study proves absolutely nothing. The $59 million is a farce. At the very least, you should dismiss the $59 million as a factor in your decision making, and move onto other issues. (Like CWB system costs paid for by the farmer.)
If you answer, “No, the same would not / could not apply to canola”, think clearly and assure yourself with certain, clear logic why, in the face of the facts as I’ve presented them, that that would not be the case. Prove me wrong – with either facts or sound logic. Please. Find a way to convince others – with facts and/or logic – that it could never happen in a multiple seller environment like the canola market. If you can, even I’ll listen with an open mind. But please, no ideological rhetoric or platitudes – that stuff don’t stick to my shovel. And don’t just dismiss this out-of-hand because you don’t like it – check it out for yourself. Ask people you trust.
But if you can’t find a way to disprove this concept with facts and/or logic, then I sincerely hope you begin to question what this study tells you. At the very least, consider it with an ounce of skepticism. Or better yet, consider the whole message the CWB sends out with the same skepticism.
The $59 million “benefit” the CWB supposedly brings is the difference in weighted average prices by destination. The study showed that sales to Japan were - on average - higher than sales to the US and the rest of the world, and sales to the US were higher than sales to the rest of the world (but lower than those to Japan). The authors assumed that these price differences were due to the CWB using its “market power” to price discriminate and that the price differences would not be evident in a “multiple seller market”. Therefore, the average annual “benefit” of the single desk was calculated to be $59 million over what a “multiple sellers market” would achieve.
Here’s the question:
If you were able to do the same calculations with all the canola sales made by every exporter in a year – producing weighted average prices to Japan, China, Mexico, USA and Canada – do you think the results would show that Japan consistently pays higher prices than China and Mexico? (Just as the U of S study showed on barley.)
Think about it. China – if it buys Canadian canola at all – tends to buy in the fall / early winter, when prices are seasonably low. Mexico will buy any time of the year, but also only when prices are low. Japan, on the other hand, buys year-round, regardless of how high the price goes.
I’ll tell you what I think. I’m certain that the results the U of S found on barley would also apply to canola – it would show Japan pays more than others for canola, year-in, year-out. And, in a “multiple seller environment”. It doesn’t take a single-desk to make this happen. The U of S study does not prove the CWB brings any benefit over a “multiple seller environment”.
Now to your answers:
If you answer, “Yes – the same would apply / could apply to canola”, then think about what the CWB’s single desk benefit really is. If the same can happen in the canola market as found in the barley market (different buyers/destinations providing different returns), then the U of S study proves absolutely nothing. The $59 million is a farce. At the very least, you should dismiss the $59 million as a factor in your decision making, and move onto other issues. (Like CWB system costs paid for by the farmer.)
If you answer, “No, the same would not / could not apply to canola”, think clearly and assure yourself with certain, clear logic why, in the face of the facts as I’ve presented them, that that would not be the case. Prove me wrong – with either facts or sound logic. Please. Find a way to convince others – with facts and/or logic – that it could never happen in a multiple seller environment like the canola market. If you can, even I’ll listen with an open mind. But please, no ideological rhetoric or platitudes – that stuff don’t stick to my shovel. And don’t just dismiss this out-of-hand because you don’t like it – check it out for yourself. Ask people you trust.
But if you can’t find a way to disprove this concept with facts and/or logic, then I sincerely hope you begin to question what this study tells you. At the very least, consider it with an ounce of skepticism. Or better yet, consider the whole message the CWB sends out with the same skepticism.
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