Competition helps farmers

[Fransisco]

Letter of the day
Winnipeg Free Press


Thu Apr 5 2007

<b>Competition helps farmers</b>



Allan Dawson (Strahl treats friends like enemies, April 4) is being disingenuous in making his case for the Canadian Wheat Board (CWB) single desk. Even if Volkswagen had only one dealer in the entire world, Volkswagen buyers would still get a decent car for their money because Volkswagen has to compete in the marketplace with all other car manufacturers.

Conversely, when car manufacturers face no competition, as in the old Soviet Union, they have no incentive to improve their product. They end up with overpriced hunks of junk. A monopoly doesn't guarantee your customers superior products or services. To the contrary, in fact.

In terms of the marketing service provided by the CWB, which has never made a convincing case that its single desk generates consistent price premiums, grain growers suspect they're getting a hunk of junk, not a Volkswagen. They want a Volkswagen. That's why they have just voted for a change that will force the CWB to get out and hustle.


DAVE WREFORD
Winnipeg

[liberty]

Great letter by Dave Wreford.

One of the foremost lessons of the failure of collectivist economics is that monopolies always result in higher costs and less efficient service delivery. After all, when your economic position is guaranteed, there is absolutely no incentive to cut costs and find more efficient ways of delivering your goods. Your clients (in the case of the CWB, farmers) have no choice but to pay whatever costs you choose to incur, since they have no legal way of penalizing you if they find your cost structure to be out of whack.

The main beneficiaries of the CWB monopoly have been its employees, and accredited exporters and its customers, not farmers.

[just_wondering]

Backhanded compliment from hursh
electors have the right to be wrong.

Gov't makes right decision despite barley circus
Kevin Hursh, Special to The StarPhoenix
Published: Wednesday, April 04, 2007

Despite their atrocious handling of the issue, the federal government has come to the correct conclusion. Barley should be removed from the single-desk selling authority of the Canadian Wheat Board.

It was easy to predict that the federal barley plebiscite results would be discredited. There should have been two questions on the ballot so that producers could choose the single desk or the open market for barley.

Instead, the feds muddied the issue by using three questions. The contentious dual marketing option -- "I would like the option to market my barley to the Canadian Wheat Board or any other domestic or foreign buyer" -- garnered 48.4 per cent of the votes.

Agriculture Minister Chuck Strahl is adding up the 48.4 per cent who voted for dual marketing with the 13.8 per cent who said the CWB should have no role in marketing barley. At 62 per cent, he says the will of farmers can't be ignored.

Single-desk supporters say the dual marketing option is not possible, that a viable CWB cannot exist in an open market. Thus the debate over the validity of the plebiscite.

In addition to the three-question format, opponents point to problems with the voters list and the low return rate for ballots. For some reason, only 29,000 producers participated.

On top of all this, Strahl actively campaigned for an end to the single desk, and basically said his government was going to provide market choice no matter what the plebiscite outcome. The plebiscite was simply a form of "consultation."

Despite all these shortcomings, it's clear the CWB does not enjoy enough producer support to continue with monopoly marketing powers over barley.

Before the federal plebiscite, the Manitoba government held its own producer vote using a two-question format. Manitoba claims the participation rate was 65 per cent and 62 per cent of respondents picked the single desk rather than the open market.

In the federal plebiscite, 50.6 per cent of the ballots from Manitoba favoured the retention of the single desk. The difference between 50.6 per cent and 62 per cent apparently depends on how you ask the question, who is on the voters list and who is conducting the vote.

Across the entire Prairie region, 37.8 per cent of those participating in the federal vote picked retention of the single desk. Had it been a two-question ballot, perhaps that number would have been as high as 50 per cent. Maybe it would have even been a majority.

However, any way you look at it, 40 to 60 per cent of producers want marketing choice. Many of these people probably believe they can have their cake and eat it too -- that they can have an open market and a viable CWB. Producers should be well aware of this debate and they can make up their own minds.

Voters have the right to be wrong. Just look at many past provincial and federal elections. Unlike other elections, it doesn't really matter whether market choice supporters make up 40 or 60 per cent of the total. Whatever the number, it's obviously too many to ignore.

In general, larger producers tend to favour market choice, so even if market choice supporters are only 40 per cent by number, they likely account for a majority of the production.

The CWB monopoly infringes on the freedoms of producers. In order for this to be acceptable, the approval rating should be well over 60 per cent.

It's sad when a marketing tool developed for producers and governed by producers no longer has overwhelming support. The producer-elected directors of the CWB have had many years to make their mark. Despite many new pricing options, support for single-desk barley marketing is not strong enough for it to continue.

The jury is still out on CWB marketing of wheat and durum. Hopefully any future plebiscites won't be a circus like the barley vote was.

Kevin Hursh is a consulting agrologist and farmer based in Saskatoon. He can be reached at kevin@hursh.ca

[kamichel]

http://www.hursh.ca/default.asp
Daily commentary by Kevin Hursh

[chaffmeister]

Although it may be dying down, it seems that there's still bitterness about the 3-choice vote. For those that think it was unfair (like Kevin Hursh), try this one on:

If the vote had been a two-choice question, perhaps they should have left out #3 (not #2 as some have suggested). So the choice would be between (1) the status quo and (2) a choice market in barley including a voluntary CWB.

It's hard to imagine the 13.8% who voted for no CWB at all would have voted for the status quo under this 2-way vote. My guess is they would have voted for the choice market - because that's clearly what they want - even if there is a voluntary CWB.

And I doubt that those that voted for #2 would see things any differently without the #3 option on the ballot.

[skhadenuf]

This vote is like any other vote in federal or provincial politics where sometimes there are 3 canditates. In this instance there were 3 legitimate possibilities. In political elections we can't just say the third guy can't run because he may split the vote and spoil things for one of the other 2. Fact is this vote represents what happens in politics every election, we may or may not like the results but it is our system of democracy and we have to live with the out come until our next chance. Further to that it's quite bizzare that some are so upset that the grass root farmer was finally given a say in their own futures. I really think this was a milestone event that should pave the way for more votes on other issues affecting us farmers, if we are wrong there is nothing saying we can't go back to some type of marketing organization. However obviously the status quo wasn't working otherwise this vote would have gone in favor of the CWB totally. I would like to express it was very dissappointing more farmers did not vote especially as I said it was really a milestone event we as farmers should have shown just how much we want to be heard. If the vote would have gone the other way I would have accepted it and moved on, we have other issues to try and fix also, why get bogged down in this when farmers have spoken.

[kamichel]

On another note lets take all the farmers that did not vote and put them into the marketting choice category. Obviously they did not care one way or the other how the plebisite turned out. So that should make them pro choice more than pro monopoly because they did not defend the monopoly by voting. Hmmmm, could this put the choice vote up to 80 or 90 percent. Lets not ignore these farmers either.

[skhadenuf]

That may be a legitamate point kamichel, but no way of knowing. Maybe there should have been a two part vote 1. keep cwb, do away with cwb
2. if keep cwb a. status quo

[skhadenuf]

That may be a legitamate point kamichel, but no way of knowing. Dissapointing farmers didn't express themselves. Maybe there should have been a two part vote 1. keep cwb, do away with cwb
2. if keep cwb wins a. status quo
b. cwb with choice

[wilagro]

And on and on she goes. Why didn't ALL farmers in western Canada regardless if they grew barley in the last 6, 10, or 20 years, get to vote in this plebiscite?

MAYBE, I will turn all of my production towards growing barley this year and not next, or skip to every 3 years.

Shouldn't I have some say as who or what organization handles my barley if and when I go to sell it?

As far as competition helping farmers...how can anyone answer this objectively as every situation is different. What is good for you is not necessarily so for me. This blank statement is b******t.

[chaffmeister]

Competition stimulates innovation, encourages efficiency, and drives down costs (prices). According to microeconomic theory, no system of resource allocation is more efficient than pure competition. Competition, according to the theory, causes commercial firms to develop new products, services, and technologies. This gives consumers greater selection and better products. The greater selection typically causes lower prices for the products compared to what the price would be if there was no competition (monopoly) or little competition (oligopoly).

If that doesn't work for you in some positive way, willy, I'm not sure what would.

[skhadenuf]

I agree wilagro, everyone that has potential to grow barley should be included to vote, obviously the outcome of the vote may change market factors for barley, therefore will influence decisions farmers make to grow it or not in future.

[chaffmeister]

Don't stop there. Perhaps any vote should be based on arable acres. Crops compete for acres - what impacts on crop will have an impact on the others. Studies have shown that CWB pricing and logistics policies (low initial, contract calls) depress other non-CWB crops as they are used for cash flow.

[kamichel]

Perhaps some farmers don't grow barley because of the itch factor and never will grow barley so why should they vote and if they did I don't see how that would help the monopoly side. We could argue who can vote till we are blue in the face, how about letting everyone in Canada vote so then the vote can be scewed by endless bullshit by the CWB.

[skhadenuf]

Well I know of alot of canary seed growers that vowed never to grow that itchy stuff and when the price hit 30 cents a pound, every pound of seed was gone. If we the ones who wanted a vote because we felt it was our democratic right start to eliminate certain types of farmers ie acres farmed, crops grown etc. then we become as much dictators as those we wanted to change. I'd rather include some that may not grow it in order to include those that legitimately might. Furthermore you don't have to grow barley to have this vote affect your farm. The consequences of this vote could affect how many acres are shifted to and from barley, therefore directly affects other crops.
As far as bullshit goes if we are going to limit the voter list to only those that support our view we are no better than those we are challenging.
And you are right not everyone in Canada should vote on this issue, but those entitled to should.