Grain, Canada style!

[cowman]

If you are a prairie farmer and want to grow milling wheat or malt barley then you must sell it to the Canadian Wheat Board. Now this only applies to the prairies and the Peace region in BC. So if you are in Ontario or Quebec you can sell it to who ever you wish. Is this fair?
What is the real purpose of the Canadian Wheat Board? Is it's purpose to benifit the prairie farmer or is the real purpose to exploit him for the benifit of powerful people in central Canada?
Consider how the system works? The CWB sells all the export grain to various markets. The claim is they get a "premium" because we have "the best grain in the world"! Is this true? Is our grain vastly superior to Europes or the USA or Australia?
If the EU and US subsidies are so large...then how do we sell anything...especially at a "premium"?
Here is one example: In the early nineties there was a hard frost over western Canada where most of the hard red spring wheat was grown. There was very little milling quality wheat around, but somehow the CWB managed a big sale of number one to Russia at a "premium"! Of course it was all on credit paid for by the Canadian taxpayer...which was never paid back...and really was never intended to be paid back! In the meantime Canadian millers were forced to buy the "hog feed" at a price about twice to three times what the "premium" wheat was sold for! So the next year we got bread that tended to fall apart if you toasted it...while the Russians had tasty bread for free, at the Canadian taxpayers expense!
And when we see this kind of crap happening we wonder why the Americans are a wee bit upset about our "state marketing agency" and call for it to be scrapped? The fact is while the Americans do subsidize heavily, how do you compete with a government marketer that gives grain away for free? The CWB is another "adscam" only on a much bigger scale!

[farmers_son]

Now, now cowman. You are generally better informed than to make comments like these.

Did you know the United States extended $1.1 billion to the former USSR to buy USA grain in 1991-92? That in the United States today the Commodity Credit Corporation (CCC) operates the Export Credit Guarantee Program (GSM-102) and the Intermediate Export Credit Guarantee Program (GSM-103) to assist importers that need credit to purchase U.S. food and fiber. These programs facilitate commercial sales of U.S. agricultural products to creditworthy foreign customers. The CCC guarantees payments due from foreign banks, typically 98 percent of principal and a portion of interest at an adjustable rate. The guarantee enables U.S. financial institutions to offer competitive credit terms. The GSM-102 is the most significant export program to facilitate corn exports. This program offers customers up to three years to repay loans. Mexico has been the largest user of GSM-102 credit guarantees for feed grains purchases this fiscal year. The Andean countries, Turkey and South Korea have also used the program extensively.

I presume you are aware of the U.S. P.L. 480 program. Since the mid 1950s the U.S. has given away grain to strategically important nations. These free sales directly competed with Canadian grain sales. In the mid 1980s, about 18 percent of the total value of U. S. agricultural exports were financed under government programs--export credits, export credit guarantees, and P.L. 480 concessional sales and donations to low-income developing nations. This is about twice the average share of exports the government had financed since the mid-1970s. About one-fifth of government financing is food aid under P. L. 480. The direct subsidy cost of the remaining government export programs is less than 1 percent of the total value of agricultural exports. In 1998-2000 Pl 480 gave away approximately $1 billion in free grain.

Remember the Export Enhancement Program (EEP)? Well did you know that EEP is still in existence although it is not being used to subsidize grain sales anymore. But the U.S. is hanging on to EEP just the same, not gone even if forgotten by many.

For a list of U.S. export programs see:

http://www.fas.usda.gov/exportprograms.asp

[cowman]

I realize the US plays this game too. There was a scandal a few years back during the Clinton administration where the "food aid" was chickens from Tyson. The scandal was the chickens were unfit to eat and the Russians threw them in the harbor! Tyson was paid top dollar for these same chickens.
The "export" trade in grain is sort of a scam all around? The fact is a lot of our exports to foreign countries is? I believe CIDA is the government agency that finances a lot of these deals...whether grain or other commodities and including some things like airplanes and nuclear reactors?
Does it bother you that we get the tail end of production at inflated prices while other countries get the cream and either don't pay for it or take several years to pay for it? Something isn't quite right with that picture?

[farmers_son]

In 2001 the U.S. used the Export Enhancement Program to export 20,000 metric tonnes of chicken to Egypt, Jordan, Lebanon, Oman, United Arab Emirates and Yemen. It is a continuing practice. To put it in perspective, in Canada the TRQ for non Nafta imports of beef is 76,000 tonnes.

It is difficult to maintain the argument that the cream is being exported through these programs when you point out that the chicken that went to Russia was unfit to eat. It always has been my impression that the food we have in our stores is the highest quality.

I would say that the export of food is not strictly business. International trade in beef and grain is very political.

[farmers_son]

I would hope that all food we sell in our own stores is the best quality we can produce as a nation. If we want the support of our own population we better make sure they are getting the best.