Good News for CWB

[wilagro]

Read this article for re-assurance in these troubling times.

http://www.theglobeandmail.com//servlet/story/LAC.20090302.CONSERVATIVE02/TPStory/National/

Even the Globe and Mail sees the light.

[Hopperbin]

You can shove them guarantees up your as

"New questions are emerging of what is the role of the state," said Joe Garcea, a political studies professor at the University of Saskatchewan. "We're basically at Stage 1."

Prof. Garcea said farmers who may want to leave the security of the Wheat Board and sell their grain on their own may not be so enthusiastic in such risky times.

"I think the arguments of those who feel the Wheat Board provides the kind of collective clout to be provide greater stability are going to find it easier to make their argument now than they did a few years ago," he said.

A number of Tory MPs, including David Anderson, the parliamentary secretary for agriculture, used their considerable influence to persuade farmers to elect candidates sympathetic to their cause. Mr. Anderson and others wrote directly to farmers asking them to end the monopoly.

But as the campaign wore on - and the economy got worse - Wheat Board supporters such as the National Farmers Union pointed out that getting rid of the monopoly would mean the end of guaranteed returns for farmers.

"The Canadian Wheat Board was designed to minimize risk in exactly these kinds of circumstances," said a flyer mailed out by the union before the vote. "Because it has government-guaranteed payments and borrowings, farmers can count on getting paid by the CWB."

[Choice2U]

OK...I posted this question on another thread and never got an answer so maybe I will try it here. I respectfully request CWB supporters to elaborate on the CWB's mandate based on a hypothetical situation to better understand your thought process. I'll keep the choices simple so one can just pick 1, 2 or 3 or a combination. For easy hypothetical figuring, assume a 20M bushel per year production. Is the CWB mandate to: 1. Maximize the $ value per bushel? (eg. sell 10M bushels at $9/bu avg. which would generate $90M but requires closing the pool 1/2 way through the season without any advance notice resulting in a carryout of 10M bushels) 2. Sell all the grain that is grown? (eg. sell the full year's production of 20M bushels at $5/bu avg. generating $100M keeping an average carryout. All growers get the same price) 3. Maximize the total $ value of the crop? (eg. sell only 18M bu (out of 20M production) x $6/bu avg. which generates $108M but pushes the carryout to a larger than average number) Please pick one or indicate if two or all are part of it's mandate. Each has a different implication to all farmers collectively as well as to each farmer individually. To summarize, your three choices are 1. Maximize the $ per bushel ($90M to a limited pool) 2. Sell all the year's production ($100M to all contracts with 100% delivery) 3. Maximize the $ value of the crop ($108M but with only a 90% contract acceptance). I await a reply.

[charliep]

Just curious how many times government guarantees have kicked in during
the past 10 years? When government guarantees have kicked, they have
reflected a shared government/CWB screw up in setting payments too high
in market that is changing (closest year being 2002/03) - not a thought
system of government support similar to the US loan rate.

Perhaps a gentle reminder that farmers are only paid 60 % during the first
half of the crop year and 80 % the last half. The CWB also controls delivery
via contracts (wheat ex durum 80 % A and 60 % B, durum 60 % A).

I am sure most grain companies would like the same privileges farmers give
the CWB. The key point is that the CWB does not deal in any way, shape or
form with farmer risk. That risk exists with farmers until the day they have
deposited their final payments. The CWB risk priority is on their cooperate
risk with farmers the line of defense and the government the second line.

You can highlight transaction (risk a farmer won't get paid) but again the
highlight a farmer only gets paid 60 % or 80 % on delivery.

[Hopperbin]

Good explanation Charlie but how does one explain it to 30,000 brick walls?

[wilagro]

Hopperbin: It is so good to know that YOU are enlightened and the "brickwalls" are so dense...but then most "brickwalls" are quite dense, and strong as well.

[malleefarmer]

in reply to Choice2U in aust previous to a deregulated market it was always option 1 with pools.
They always closed 2/3 of the way through harvest.
Now we have around 7 maybe 8 companies running pools, early sign up bonuses and still shutting before harvest is complete with probably 20 cash buyers most days nothing has changed for any growers basically pool sellers have more options than ever as do cash sellers
THE SKY HASNT FALLEN IN.

If for some reason which i doubt will happen wheat prices rally substancially pool sellers will be in front but at the minute cash sellers are ahead with money in the bank no more risk wereas with pools growers carry 100%

CHOICE i dont knock poolers or cash sellers or on farm storers each has different marketing thoughts and needs just a pity you poor guys who a tied to a prehistoric outdated system.

You politicians must be piss weak and dont listen to farmers or conversly listen to the CWB only and the pollies cant tell shit from clay.....

[malleefarmer]

should read "your" politicians

[charliep]

Will note the article made the political case for status quo with some reference to transactional risk (risk of not getting paid). The article does not make a business case for having the CWB single desk survive as it is today.

[cropduster]

Great comments Mallee ! !It`ll take the poolies here a day or two to respond to that with their trash!

[Choice2U]

I ask a simple question to CWB supporters and no one gives an answer. What is your problem folks???? Do you not care? Thanks Malleefarmer for your input. All 3 of these situations have happened in the past so there was no wrong answer. I just wanted to know if CWB supporters thought about this stuff or just live by blind faith. Given all 3 scenarios have happened, it then becomes fact that the CWB does what it wants for its own reasons in its own time frame without ever telling us why. The CWB will never do what's in the best interest of my farm unless their objectives happen to coincide with my situation. I already have to anticipate market direction but now I have to include which objective the CWB might incorporate each year. Here in lies the answer to one CWB supporter's question in a previous thread to market choice people, "can the CWB ever do anything right?" The answer is yes but only by coincidence. I am not about to run my business on a lucky CWB guess and I am not about to put blind faith into the collective good as my father never raised me to shoot for a little better than average.