• You will need to login or register before you can post a message. If you already have an Agriville account login by clicking the login icon on the top right corner of the page. If you are a new user you will need to Register.

Announcement

Collapse
No announcement yet.

CWB Premium Myth

Collapse
X
Collapse
 
  • Filter
  • Time
  • Show
Clear All
new posts

    CWB Premium Myth

    The Case Rests on Shaky Math

    Rolf Penner, For The Calgary Herald
    Published: Tuesday, July 03, 2007

    Despite all evidence to the contrary, a slim majority of Canadian Wheat Board directors continue to claim the government legislated monopoly puts more money into farmers' pockets than they would otherwise receive in a competitive marketplace. Real world, back-to-the-farm-gate price comparisons have repeatedly shown this is, in fact, not so.

    The Frontier Centre for Public policy recently released a report titled CWB Price Premium a Myth, which shows once again the prices U.S. farmers get from private grain companies are substantially higher than what Canadian producers are allowed to receive under the Canadian monopoly system.

    On June 14, Alton Grain Terminal in Bottineau, N.D., was offering $6.10 a bushel for spring wheat, while 75 kilometres north in Boissevain, Man., the best a farmer could get from the wheat board through its fixed- price contract was $5.10.

    For every 500 acres (202 hectares) of spring wheat grown, this translates into a $20,000 loss, if you assume an average yield of 40 bushels per acre, although Manitoba wheat crops regularly exceed the 50-bushel mark.

    With even small family farms running thousands of hectares, the economic impact of this kind of loss is substantial. Forcing farmers to accept lower returns than what is otherwise available puts them at a real competitive disadvantage in the global arena.

    According to statistics Canada, 17 million acres (6.9 million hectares) of spring wheat went in the ground in the three Prairie provinces.

    The Frontier report shows that the range of economic loss runs from a minimum of $585 million, when comparing the board's fixed price contract to the U.S. price, all the way up to a staggering $1.2 billion, when looking at the more commonly used CWB pool price, a yearly price averaging option.

    The CWB's pricing of Canadian wheat well below market value to make sales is one of the reasons for the difference.

    A recent Reuters news item clearly makes the point. It reported that millers in northeast Brazil received an 82-cent per bushel discount in early June. Lawrence Pih, president of Moinho Pacifico, said, "They paid $190 per tonne two weeks ago when the price was $222 per tonne FOB." Another reason is the higher costs associated with Canada's single desk seller.

    One example of this comes from the federal grain monitor, which shows $20 to $30 per tonne higher costs for handling board grains than for handling free market canola.

    CWB directors point to a select few so-called independent studies to back up their claims.

    They fail to mention the Canadian Wheat Board paid for these studies. This obviously disqualifies them as independent.

    Furthermore, they do not go back to the farm gate, and they use a completely unverifiable, secret database no one else may see.

    The Frontier report, on the other hand, is instantly verifiable through web links that go straight back to the original sources and show in a simple, easy to understand manner what farmers would receive in an open market environment.

    The handful of directors who regularly make these deceiving, erroneous economic claims about wheat, also make them about barley.

    This is how they rationalize spending hundreds of thousands of dollars of farmers' money on a court challenge to block the federal government's plan to give producers marketing choice in barley.

    The directors ignore the expressed wish of the 62 per cent of barley growers who represent 70 per cent of the acres grown, who voted for choice in the recent producer plebiscite, the 58 per cent from their own 2007 survey who believe competition would lead to better services and the 54 per cent who think it will lead to higher prices.

    It is clear these directors are not interested in farmers' rights to their property, the collective voice of farmers or in doing what is in the best financial interest of producers.

    They appear to be driven by an unwavering commitment to the notion they alone know what is best for all farmers, and are willing to say and do anything to preserve their positions of power and control.

    The federal government is right in wanting to end this charade by putting that control back where it belongs -- in farmers' hands.

    Rolf Penner is a Manitoba farmer and the agricultural policy fellow for the Frontier Centre for Public Policy. The CWB Price Premium is a Myth report is on the Frontier Centre website www.fcpp.org


    © The Calgary Herald 2007

    #2
    You would believe any report from the "Frontier Centre for Public Policy"?

    Check out who supports it...might open your eyes.

    Comment


      #3
      Sounds like a dangerous bunch to me! NOT!

      "The Frontier Centre for Public Policy is an independent, Winnipeg-based "think tank". Our mission is to develop and popularize policy choices that will help Canada's prairie region live up to its vast but unrealized economic potential.

      The Centre was founded by a group of individuals interested in making the prairie region a good place to live, work and prosper. Our advisory board includes both experienced community leaders and academic specialists. Charitable status as a registered educational organization was granted by Revenue Canada in April 1999."

      Comment


        #4
        What is durham?

        Comment


          #5
          What's a lakenheath?

          I didn't realize spelling counted on this board. You have your work cut out for you.

          Best of luck in policing that.

          Comment


            #6
            Here's an eye opener Willy.

            http://www.siemenssays.com/wp-content/uploads/2007/06/emailing_-alton-grain-terminal-spring-wheat-price-june-14-2007-llc_htm.pdf

            Its a copy of the Alton grain terminal price Penner is talking about. $5.73US and yup with a 94 cent $ it works out to $6.10 Canadian. His numbers are right and like he says real easy to find and double check.

            Comment


              #7
              Hey willie! You belive all the dribble that comes from the borg right? As in one post below, the borg is whinning about not having enough malt barley?, what a bunch of total B.S.! I will not even net over $3/bus for good 6 row malt from last year, what a joke.

              Comment


                #8
                Wheat over 6$ many times?

                Dont worry guys the greatest time ever to be a farmer is just around the corner.

                Comment


                  #9
                  Willy, the reality is that The Fronteir Centre report just made it a little more public what any knowledgable grain farmer on the prairies already knew and has known for years. It's not a case of relying on the Frontier centre to tell me something to believe, this is the frontier centre telling a wider audience what is reality when it come to the cwb and premium prices.

                  So just because you may need some sort of validation, real or made up, from some higher authority in order to justify what you believe, most of us free thinkers on this board, are quite capable of taking in tons of information and sorting through what we believe to be true and relevant and what is not, then use that information to our own best advantage.

                  That's how freedom works and how a free market works.

                  This is pretty simple stuff Willy! Providing you can put the radical Poolie/co-operative movement/CCF/NDP/Socialist philosopy in the garbage where it belongs.

                  Comment


                    #10
                    Willy,

                    I have no problem looking closely at all claims... what is key at the end of the year... is that I and my family have the simple freedom to say -NO- if a marketer is getting us a bad deal.

                    CWB pools are a bad deal... any way you cut it.

                    ANd Cash pricing is not avaliable like it is in other non-board grains... cause the CWB drags all sales back through the pool.

                    Give us a cash price Willy... from the CWB no strings... guess what?

                    The Daily Price Contracts prove but one thing... the CWB pricing system is a mess.

                    If I hold futures only... I should have the right to cash price any day... yet the CWB won't be fair and realistic.

                    Willy... this is killing farms and their families... and you know it. Not every one is as rich as you and can operate without cash flow!

                    Answer me one thing... why can't I cash price my 2006 harvested CWRS on July 5/07?

                    It is criminal the CWB won't allow cash pricing!

                    Comment


                      #11
                      The $6/bushel was u.s. dollars per bushel converted to canadian dollars when the exchange was 14-15%.
                      Today the Bottineau farmers elevator in North Dakota is offering a cash bid of 3.70 for Lacey and Conlin barley. Do you still like central desk control?
                      Every couple of years durum wheat gets crazy high bids. Get this- at Carrington N.D. they mill durum wheat and employ quite a few people in a small town of maybe 1200 people.{not totally sure of the pop.}. They import huge amounts of durum from Swift Current S.K., to use. We can't do that in our towns without buying back our own grain or going to jail. Are we behind the times or behind the iron curtain?

                      Comment


                        #12
                        Anyone who believes that "spot price" is the price that we should get is dreaming. The spot price is used to get some supply but does not guarantee this price for ALL producers. After the buyers fill their contracts...see if you will receive the higher "spot price" for long.

                        Of course if you live along the border your chances are much better.
                        For others located say in N Sask. or Alberta, we are SOL.

                        At least the CWB kinda evened things out...but you free marketers don't want that. Am I right on that?

                        Comment


                          #13
                          yes you are right!
                          -all farmers (businesses) are not equal.
                          I will agree on that congrats

                          Comment


                            #14
                            Why Willy I thought this was all about getting the best price and now you're getting all philosophical on us here.

                            You're letting your ideology show. Egalitarianism I do believe.

                            Okay lets hear it, why should everyone receive the same price? By what right? Why is it moral and ethical to take money from someone who is closer to a market and give it to someone who is farther away from that same market?

                            Comment


                              #15
                              Willy- in the 1980's we were dried out, 5-10 on canola 12-15 on wheat. Further north the crops were heavy, no one shared with us then, nor should they. The crop zones south to north all have their advantages. Higher protein closer toa different market. Futher north it is generally 2-3 degrees cooler meaning much higher wheat and canola yields. Farming is changing for the better if we just let it happen and quit putting the brakes on with fear mongering. Oats are grown up north, for export and for profit, even in the peace river region. All on the open market, why not barley? Do we have to communize every thing?

                              Comment

                              • Reply to this Thread
                              • Return to Topic List
                              Working...