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Who can market to Bogasari Flour Mills in Indonesia

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    Who can market to Bogasari Flour Mills in Indonesia

    The StarPhoenix (Saskatoon)
    8 February, 2007

    by Rod Flaman


    'Choice' doesn't confer marketing advantage


    Following is the opinion of the writer, the CWB farmer elected director to represent District 8.

    Twenty miles south of my farm in Edenwold, on the TransCanada Highway, there are three inland grain terminals owned by Saskatchewan Wheat Pool, Pioneer and Agricore United.

    Much of the area's grain business is done at these terminals. They compete for both Canadian Wheat Board and non-board grains.

    When local farmers have grain to sell, they probably start by calling these three companies to check what prices they offer. Farmers have this choice now and they would continue to have it whether or not the CWB exists.

    The companies are free to compete on basis levels, grading, trucking premiums and handling charges.

    These competitive factors will continue to exist with or without the board. This certainly represents choice, but it's not marketing.

    Broader choices do exist in the area, with Terminal 22 at Balcarres, the Weyburn Inland Terminal, Cargill at Regina and AgPro at Moose Jaw.

    The problem, however, is that the choice is illusory. Terminal 22 is run by Cargill. AgPro at Moose Jaw is an arm of the Wheat Pool. Furthermore, trucking to these locations is more costly.

    How many more choices do we need? Converting the CWB into a small underfunded grain company without facilities will add nothing to this equation.

    This cannot, and should not, be the substance of the marketing choice debate.

    A few farmers want to export their grain directly to end users. This is marketing, and it's costly if you take it seriously.

    The CWB is excellent at marketing and does it to more than 70 countries. It spends a lot of money on market development and promotion of branded Canadian products, and has a world class reputation.

    The board is the major funder of the Canadian International Grains Institute in Winnipeg and continually brings in international customers to showcase CIGI's wheat and barley in the pilot mills, bakery, pasta plant and the malting and brewing technical centre.

    Ongoing research and development is geared to promote use of Canadian grains in specific end-use products in customer countries.

    Some individual farmers invest time and money to promote their products with end users as well, but these efforts are not in the same league as CWB's.

    The choice by individual farmers to make these investments can give them a marketing advantage. Premiums created by individual farmers can be extracted from the marketplace through the CWB's producer direct sale.

    If the selling price is higher than what the CWB would have obtained from that same market, the farmer keeps that premium.

    Out of 65,000 farmers in Western Canada, only an extremely small number demand this opportunity.

    Farmers who've identified such opportunities regularly use producer direct sales and are able to combine it with other CWB producer pricing options to capture market volatility and manage risks.

    So, this, too, cannot be the substance of the marketing choice debate.

    Who gets to sell Canadian wheat and barley to Canada's largest international customers such as the Japanese Food Agency, the China Oilseeds and Foodstuff Co., Bogasari Flour Mill in Indonesia, Warburton in the U.K. and other large customers around the world becomes the important question.

    Will Canadian wheat and barley sold to these customers be available only through the board's single desk or should multinationals such as Cargill, ADM and Bunge be allowed to compete against the CWB to sell the same product?

    Competition among a number of sellers to sell the same product does not drive up its price. The lowest bidder makes the sale.

    That is why consumers, including farmers, highly favour competition. In this case the consumers are the millers, bakers and maltsters in countries with whom CWB does business. Competition in a marketing choice environment won't be good for farmers.

    If the CWB is in competition with Cargill and ADM, it's no longer in the board's best interest to invest in market development because competitors would capture the value it creates by using farmers' money.

    Under marketing choice, the CWB must depend on competitors to buy and move grain because it has no facilities. It will be difficult for the CWB to add value when the multinationals rake off all the profits for their shareholders and set handling charges for farmers who deal with the CWB.

    This is the marketing choice which is the substance of the debate. If farmers understand that, the choice they'd make would be to continue to use the board as their marketing partner.

    In the federal government's barley plebiscite, the preferred option is clearly identified with special wording that starts with, "I want." The alternatives start with: "The CWB should."

    Canada's New Government has made glib remarks about a "strong CWB" in a marketing choice environment, but has shown absolutely no intention of allowing the board to strengthen its business or expand its mandate. It has muzzled the organization, fired its visionary CEO and put CWB haters on its board.

    Every indication is that the government wants to peel the CWB like an onion, layer by layer, till it withers and dies. It makes you wonder what the government really has in mind for the farmers of Western Canada!

    #2
    Speaking Points CWB Directors are Forbidden to Discuss with the Media

    1.Grain companies merely act as Accredited Agents of the CWB.

    2.The farmers' money that is presently being spent on market development and promotion of branded Canadian products in all/third world countries could be share/downloaded on the cost of the multinationals/governments, not borne solely by the producer.

    3.Farmers are the major funder of the Canadian International Grains Institute and the money keeps a -rollin-rollin-rollin in. Again, forced- benevolent farmers are funding "Ongoing research and development" which should be paid for with more Government funding.

    4 Some individual farmers invest time and money to promote their products with end users as well, but these efforts are certainly not in the same league as CWB's, because the farmer makes the money, not the Board.

    5. The producer direct sale is a fancy catch-phrase that only means selling through the CWB's greedy little cash net. Nothing more.

    6.The CWB would like to erase minority-voice farmers.

    7. Dictator Suharto in Indonesia appointed Piet Yap's Bogasari Flour Mill in Indonesia to be the SOLE importer of wheat.

    Piet Yap just happened to be listed as Gordon Machej's business partner on one website, and it seems that Machej is an accredited exporter for the CWB on another website.

    The answer to the question: "Who gets to sell Canadian wheat and barley to Canada's largest international customers such as the Japanese Food Agency, the China Oilseeds and Foodstuff Co., Bogasari Flour Mill in Indonesia, Warburton in the U.K."?, must never be made in public:

    Where there's a will there's a way.

    8..Newly-created competition within the 'single desk system' itself won't bode well for the majority of organic farmers, because the CWB decided to select a handful of organic farmers,(creating a CWB-in-house marketing-choice system), and market exclusively for them within the present single desk environment.

    9. 23 guys from Grand Prairie can get the CWB to market and pool IP grain exclusively for them!

    10. 82 guys from Brandon Manitoba can approach the Board to market and pool "live grain" only for them.

    11. The substance of the debate the CWB must avoid at all costs is that farmers should be able to sell what they grow, and not be jailed for it.

    12. The term Board haters is hard to prove in court.


    The only fact doth sides agree upon is that the Wheat Board IS an onion.

    Parsley

    Comment


      #3
      Parsley,

      I find it very objectionable that CWB management has been offered BILLIONS... to transition to a choice marketing system, yet did not even offer this option to farmers and ask their opinion.

      Now Flaman says the CWB, an underfunded ... if the CWB is underfunded... Flaman, Ritter, Macklin, Oberg, Hill, etc. and most of all Measner are responsible for the underfunding, and demise of the CWB.

      Comment


        #4
        Rod Flaman - The Marketer

        This isn't real clear, but best I could do.

        [URL="http://www.wedinfarm.com/cwb.html"][/URL]

        Comment


          #5
          That's a blast from the past Wedino. Some people can change their opinions when they get more information. Others put their heads in the sand and ignore any facts that don't fit their opinions.

          I read an intersting quote the other day. It went something like this. Extremely powerful and extremely stupid people have something in common. They don't change their opinions to fit the facts. They try to change the facts to fit their opinions. This is very unfortunate if you happen to be one of the facts that needs changing.

          Turns out after many thousands of dollars and hundreds if not thousands of hours of individuals time spent arguing in court that some of the assumptions being made at the time were totally wrong.

          Even today a lot of people probably think that this whole debate is about whether you can get in your truck and haul your grain to the states for a higher price. BTW that activity is NOT marketing, as explained in a previous post. It is simply price taking.

          The americans are VERY sensitive about Canadian grain moving across the border. Just ask an American farmer. In fact ask a Canadian farmer how they feel about anybody else's grain coming into Canada. I know many will point to Canola and the plant at Velva and say that this is a case in point to prove that there is no problem with grain moving into the US. This ignores the dozen or so times the US has tried to close the border to Canadian wheat. The Americans don't export Canola. They do export wheat. For every bushel of Canadian wheat that goes to the US they must export one more bushel of their wheat into the world market. They probably get less for the wheat they export into the world market than what they pay for Canadian wheat. Just ask senators Conrad and Dorgan how they feel about Canadian wheat coming into their elevators.

          The CWB sells as much wheat as it can to the US and captures the premium available in that market. Farmers selling wheat into the US will not get as much as the CWB gets and will simply annoy the US farmers. The CWB does not sell to elevators. The CWB sells to flour mills. The flour mills are generally not interested in buying form individual farmers. They want their grain delivered in large volumes and they want it consistent. Rail shipments from Canadian elevators accomplishes this. If you as an individual can get more money for your wheat selling to the US or any other market than what the CWB is getting for that grain you can go right ahead and do that. Any premium that you get over and above what the CWB would have gotten in that market is yours to keep. The CWB simply asks that you pay to the pool accounts that value that would have been received if they had made the sale. This ensures that the value of Canadian grain sold into export markets is not comprimised by any individual making a sale.

          If you want marketing choice you have it. If you can market better than the CWB you can make more money.

          Comment


            #6
            This Star Phoenix article will be known as Flaman's famous 'onion' article.And he's right,socialism has many layers.As Churchill refered to it"a riddle wrapped in a mystery inside an enema".And if our vastly superior and enlightened leaders are going to be able to keep screwing the farmers we will definitely continue to need the enema.
            The main difference,though,between the onion and socialism?When you chop up socialism NOBODY CRIES.

            Comment


              #7
              Your reasoning ability must have shifted along with your opinions, because:

              1. The trade actions have been aimed at CWB-owned wheat/barley, not farmer-owned grain. The CWB is the target.

              2. No trade actions have been launched against the feed mills or the farmers in Canada that ship millions and millions of bushels of feed grains, all sidestepping any association at all with the CWB. Both the Americans and the CWB love the arrangement or else either would ammend the arrangement.

              3. Maybe the CWB is capturing premiums, but the farmers' yearly toal payments from board grains do not reflect the financial benefits that the CWB itself garners. $1000.00 Christmas bonuses, for example.


              Vader, here is where CWB reasoning in #4, although shifty, remains constant:

              4. "The CWB simply asks that you pay to the pool accounts"........

              translated:

              Canadiano Wheato Boardiacci wants a cut of all the action, chow.

              Get an accredited exporter to do the translation, as they are accustomed to translations. How about...... ah...... let's see.....Eagle Sterling?

              Parsley

              Comment


                #8

                Comment


                  #9
                  Flaman thinks he has something that works better than the market and it does------for HIM.How many quarts of strawberries or is it raspberries would you need,comrade,to come up with $100000 in directors fees and per diems?Carpe the per diem.As hayek wrote in 'Road to Serfdom'the worst get on top.Comrade Himmler for example was only a failed chicken farmer but did he look good in that snappy uniform.

                  I'm sure the glamour,the power would be enough to change any shallow mind with no integrity,but the fear of losing the money might clinch it.Make a singledesker out of you.

                  However I'm sure its none of this.Its just that Flaman has seen so many convincing documents you mere peasants could not be entrusted to see.Just get your beliefs from comrade Flaman.He'll tell you what to think so you don't have to.

                  Comment


                    #10
                    Vader,

                    If I am marketer worth my salt I will price discriminate when selling whatever it is I sell.

                    Grain growers should be no different.

                    The law of one price occurs at times... like at a bankruptcy sale... and even the Reciever normally allows competition to bid UP the value of items being sold.

                    Distress sales do bring values down... as often this is their purpose... and they attract buyers looking for the property at X % under Fair Market Value. Where is, As is.

                    Ever heard of Elastic and Inelastic markets Vader?

                    In many markets 80% of the value is not primary to the pricing of the phisical component. The value is attached: to service, asset management, inventory management, intrinsic quality, risk management of inventory pricing, and the good will that the consumer will pay for the good name of the supplier.

                    If I were US citizens, I would keep the CWB our of selling CDN produce to me, or expect a 10% discount.

                    The CWB avoids local commerce and the value this gives to local communities.

                    When a CDN grower directly delivers to Shelby MT, especially at a slack shipping time, it makes the citizen of Montana, the whole US commerce & transport system all the way to the enduser... and the Montana grower themselves prosperous. Upgrading their US quality then often goes to the MT local economy as well as to the multinational milling co. I believe this is only fair and build our relationship between our countries stronger.

                    If I develop this relationship, and am able & willing to take all the risk for being paid, delivering quality, and creating good will; why should you Vader get a chunk of my hard work, and the prosperity I created? What did you do to deserve a cut from my families and communities work?

                    The purpose of the 1996 Rod Flaman letter... was to express these values; and these principals are as strong today and are included in the Biblical"10 commandments".

                    Are you saying we should ignore the "10 Commandments" and "common law principals" that arise from them... simply because we "NOW UNDERSTAND" things "better"?

                    SOme things don't change Vader... including human nature and GREED to get something for nothing...
                    Envy; which would rather prevent prosperity for someone elses hard work... if you can't have a free cut for yourself!

                    Comment


                      #11
                      parsley,

                      The North Dakota Wheat Commission has stated that with or without the Canadian Wheat Board they will continue to fight against wheat imports from Canada.

                      The WTO challenge against Canada was targeted against the entire industry, including the transportation system, the grading system and variety registration system and other aspects of the Canadian Grain trade.

                      I assume that you were actually aware of all of these things and that your objective is to "change the facts to fit your opinion". The only question now is whether you are extremely powerful or extremely stupid.

                      Comment


                        #12
                        Vader,

                        Strange how often those who THINK they should be Extremely Powerful, have a tendacy to become...

                        Comment


                          #13
                          Vader:

                          The North Dakota Wheat Commission has stated that with or without the Canadian Wheat Board they will continue to fight against wheat imports from Canada.


                          Who said it and where. Name names or a website.

                          Comment


                            #14
                            I believe it was the president in conversation with a CWB Director

                            Comment


                              #15
                              You sound a little touchy.

                              one of the lessons I learned Vader, is this...... what is stated,(CWB is a hoax), isn't neccesarily the position taken.(Yes!-it pays $500/day)

                              I memorized the lesson,it was a good one, but now I'm stuck with what North Dakota Wheat Commission says, not what they might do!

                              Maybe they're turkey-gobbler talking.

                              I also observed the "change the facts to fit your opinion" lesson from a farmer I thought I knew; his snootfull of facts blew everywhere,trying to destroy the Canadian Wheat Board, but were discarded with the kleenex, once his objective got re-defined.

                              About the challenges against the "entire industry"...why are DA farmers paying the trade bills for the entire industry?

                              The CWB website say farmers paid about $17 million 1990.

                              The CWB must think all Western farmers are stupid about the issue of "who pays".

                              Parsley

                              Comment

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