Politics and Grain: 2006 Canadian Wheat Board Election

86 Replies to “Politics and Grain: 2006 Canadian Wheat Board Election”

1. I’m not a farmer so I have no personal stake in this isssue one way or another, other than not wanting to live in a quasi- stalinist state. To quote someone from somewhere “democracy isn’t six people in a lifeboat voting to eat the seventh.
   mbaron

2. I still run into many farmers, mostly older, who gripe about the end of the CROW. Almost invariably, a discussion that starts with the CWB switches to the subject of the CROW. In the minds of a lot of farmers, the two issues are interchangeable. On both scores, they see the policy-makers in Ottawa as dictatorial and threatening. If put to a vote, they will stick with the status-quo every time. If they could have voted on the CROW, they would have overwhelmingly chose to have kept it.
   As Al Loyns pointed out in a recent talk, the CROW was less of a subsidy and more of a tax on value-added processing. It meant that Western Canada could do little else but grow raw materials and ship them out as fast as possible for someone else to process. The prairie grain shipping system was a central planner’s worst nightmare, plagued by endless delays and rapidly decaying infrastructure. The damage to the prairie economy in terms of lost opportunities was incalculable.
   Thanks to avowed socialists like Wayne Easter and countless closet socialist cohorts across the prairies, the CROW episode dragged on far longer than it should have. Unfortunately, it looks like they’re set to do the same with the CWB.

3. I wonder what the results would be like if all western farmers that used to or were capable of producing wheat but didn’t because of the CWB monopoly, were allowed to vote?

4. I remember the CROW debate very well. I was still in the farming buisness at that time. It’s funny how the 7 billion that was on the table in the initial stages of the discussion dwindled to 1.3 billion by the time it was paid out. The NFU, the NDP, the CWB, the Sask Wheat Pool and every other left wing group was yelling and screaming that the CROW was non-negotiable, and that the sun wouldn’t shine if the CROW was removed. That resistance to inevetable change cost each and every producer 80% of what was initially on the table. They should be real proud of what they accomplished for us. Not.
   Funny, it’s the same bunch standing in the way of what must happen to the CWB. How much will their stubbornness and foolishness cost the few remaining farmers?

5. mbaron. Absolutely agree. We should dismantle the CWB… (and Healthcare, and Sasktel, and Saskpower, and PetroCanada, and welfare, and Education, and Unions and most of the Civil service… and…)
   Texas Canuck. I would also like to see that list, if only to go have a look at the farms that I should not model mine after. If you have already made a bad choice based on ideology, of what import to me is your next decision?? In fact the reasons why cereals should be included in an agronomically sustainable farm would make a good thesis topic.

6. The proof is in the farm gate returns, economists like Al Loyns and policy wonks like farmer Rolf Penner show time and again the board is costing us billions. Farmers just across the lines consistently get more for their wheat. Its not rocket science its simple math.

7. The Crow Rate Benefit had nothing to do with the CWB.
   The CBC recieves about a $Billion per year from govt.
   Prairie farmers were recieving close to a $Billion per year also, until the Crow Rate Susidy was canned in about 1996. Chretien did away with ‘in-perpetuity’ at the urging of some prairie farm groups.
   The prairie provinces produce much, much more grain and oilseeds than Canada needs, so a huge percentage is exported. Before the crow, long distances to port rendered prairie grain farmers unviable.
   But the CRB also allowed secondary industry to locate in Ont and Que. Where the votes are. Unlike the US, where the majority of processing/value-added is in the Midwest.
   The CBCers are still enjoying their $billions. The prairie farmers lost their $billions and are waiting for the processing/jobs to be pryed away from Central Canada. It may happen in time. It would make a more viable ag industry if it did.
   Until then the GRIP, AIDA, CFIP, CAIS begging will have to do. Do we really believe Otto could have delivered on $7,000,000,000 ?? from Trudeau ?

8. I am reposting this as the discussion yesterday degenerated into a harangue about who is or is not a patriotic Canadian.
   I am a 68 yr old farmer who gave up hope that the CWB would ever be an asset to me or the industry. I have not grown either wheat or barley for 10 years now, and my only regret in that decision is that it took me so long to figure it out. I now grow only non-board grains, not only because of my philosophical view, but also because I make more money. I don’t recall what year it was that oats were removed from the jurisdiction of the CWB, but it was done because oats was considered to be specialty niche crop not grown in enough volume to make any money for anybody. Once out from the clutches of the CWB oats is now my best moneymaker, and the oats related “value added” industry has flourished, not to mention the increase in oats export to the U.S.A.
   I am able to make full use of futures and options markets with my grains, not like the restricted “choices” the CWB has offered to producers in the last couple of years in an effort to make it look like they are mellowing.
   The CWB was conceived in order to keep grain prices low so as to assist GB to recover from the effects of WW2. They have been very successful in their mandate.
   Please Mr. Strahl, bring on a dual market before I retire. I might even grow some wheat.

9. To Beever.
   I couldn’t have said it better myself. The main difference between you and me is that I’m still farming.

10. Len… Keep the faith… I admire you for hanging in there. I didn’t do what you did, and I’m not farming. It distresses me to see the lengths that the anti-choice side go to protect the CWB monopoly. Shameful.

11. Len… In my last few years of production it was oats and canola that kept me going… not wheat or barley. Need I say more?

12. Previous, did someone say Al Lyons was a University Professor ?? An Ag-economist prof ?? small scale farmer ??

13. “Chretien did away with ‘in-perpetuity’ at the urging of some prairie farm groups.”
    He did not. It was never there. You were lied to.
    “Do we really believe Otto could have delivered on $7,000,000,000 rom Trudeau ? ”
    The Hon. Jean Luc Pepin had allocated more than 7 billion – 5 years later. The Hon. Charlie Mayer bantered 7 billion in 1993 before going down with Kim Who..

14. Al Loyns is a retired Ag Economist. He taught ag economics at the University of Manitoba for many years.

15. Right on Larry… the left cost farmers over 5 billion dollars. What would that money have done to the farm economy at the time? It will be interesting someday to find out what the left has cost farmers through the CWB. The CROW will pale in comparison.

16. Should add that Al Loyns also continues to run a small farm.

17. I do not know about you, but I never believed much of what Quebec Liberals promissed. Especially Trudeau Liberals.

18. Ag Economist !!?? now that explains it.

19. Anyone here from Green Lake?
    Wheat/barley does well on Green Lake. Jimmy Sinclair made his fortune on Green Lake; had a year-round operation, too.
    …-
    …-
    Sask. government wants feds to stay out of wheat board elections
    Canada.com – 1 hour ago
    GREEN LAKE, Sask.— Saskatchewan’s government says the result of elections at the Canadian Wheat Board prove Ottawa should back off on changes to the organization. —-

20. Beev:
    That was 7 billion in 1974 dollars
    you received 1.3 in 1996 dollars
    as i stated previously the tragedy is in the debate and what it has done to the prairies.
    And yes i agree the CWB and CROW are separate issues; however, the policy debate is similar.

21. .. $$ seven billion in Quebec Liberal promises to prairie farmers is worth …
    vs 1.3B in hand. A bird in hand is worth …..

22. Larry, If I remember right, in the dying days of the conservative government, the 7Billion was on the table. My bro-in-law was involved politically at the time, and was aware of the discussion. Garf S. from the SWP, and ? from the NFU along with the NDP in this province raised such a ruckus that Charlie couldn’t get it done. Correct me if I’m wrong, but didn’t Ralph Goodale come up with the 1.3 Billion figure after some very creative accounting and smokescreens?

23. Just over 50% of eligible farmers voted, and just over 50% of them voted for pro monopoly candidates. Rough calculation reveals that just over 25% of eligible voters favor the CWB monopoly. Quite a “landslide” eh? Of the 45 or so percent who didn’t vote, how many won’t vote on any question, and how many have given up on the CWB in frustration and feel that it’s futile. The feeling of futility comes from the previous govt “loading the dice” in favor of continuing the monopoly. Now the present govt. is trying to do the same thing only in the opposite direction. Come on like minded farmers, now we have a fighting chance. Get out there and help yourselves.

24. You are correct on Goodale’s 1.3 B. I did not write this piece to get into a CROW debate. It is there to serve what happens when you lose sight of the debate.
    It becomes a debate on fear and rhetoric and in the end – no one is accountable. To wit: Where is Wayne Easter, Blakeny and Garf?
    B.Hoax:
    Otto was born and raised in Saskatchewan. Problem was he was like Panasonic – slightly ahead of his time.
    I worked with him for 4 years in Winnipeg. He didnt become Dean of Law at U of S under the age of 30. (29 i think) with no vision. I don’t want to get into a LIB debate either. My family still reminds me of LIFT, every chance they get….lol

25. I hear operation “lift” was known as “sunk”. lol
    I guess the whole point is the CWB may or may not cost framers $$. The crow, however, did put $Billions in his pocket. but, no doubt at some cost in lost value added. But who would of made the money on prairie vs eastern value added is the question.
    One thing is for sure; the track record of Ag-Economists is VERY poor… talking from experience.

26. As Len points out only 1/2 of persons a ballot was sent to voted.
    But he skews the numbers to say that those that didn’t vote support dismantling the wheatboard. Using his logic you can also easily prove that 75% of people support and only the 25% against voted….
    Like saying that the hundreds of thousands who didn’t vote in the last federal election would have supported the conservatives and therefore the tories should have a majority.
    The fact is they didn’t vote, so you can’t know what their views are. All you can tell is the information given to you. Quit making up scenarios that just don’t exist.

27. First, Quebec Libs and now Law professors !!?? Deans, no less .. at universities !! lol .. just kidding…

28. Yup, B., more upLIFTing than anything WONDER could throw at u
    SUNK = a similar device purchased at the dollar store…
    end result = pendulous
    ok now back to our regular programmed show….
    and heressssssssssss KATE:

29. Question; at the same time that the Crow was canned, the delivery point against a WCE Canola futures contract was shifted from Van to Saskatoon. Why ?? No ocean going vessels in the ‘Toon’. (flax; T-bay to Virden)
    This had the effect of reducing the “apparent” ‘basis’ cost to the farmer by perhaps $30 per tonne. For the sake of argument; without the Crow, Van basis would have jumped from $30 to $60. Toon basis ‘appears’ to be $30 better, BUT the world price for Canola(WCE) is $30 less than Van. Same shit different pile, so why the co-incidental change ?? I have asked this question many times(even to ag-economists) and never an answer. Not even an unfavourable one.

30. When the change was made on September 28, 1995…moving the delivery point to Stoon versus Vancouver…i was Director of Operations at the WCE. The change had dick to do with the CROW.
    It had everything to do with the collapse of the june 1994 canola contract. The green machine’s crush plant was viewed to be the new price discovery mechanism (“wrong”).
    Convergence still sucks. Farmers know less today what the export price is of canola. The warrant and delivery system put in place should have made delivery against the futures easier. (didn’t).
    When the new contract was put in place in 1995, basis levels were thought to stay in a +15 to -20 range – none of the -50 BS that occured in 2003.
    short answer is that the contract was to become more efficient and transparent – it didnt.
    there have been changes since 1998 and i havent stayed close to them.
    Does the contract work today? It works for the people using them.
    Is it a price discovery mechanism that farmer’s can use. NOT.
    others will give you a better overview of the contract today – i’m not real happy being a part of the original contract.
    Bottom line is you no longer know what the export price of seed is – kinda like the export price of wheat – and neither commodity supplies KY as a condition of trading/growing it.
    Zap me an email if you want a longer version of the contract.

31. What is clear is that there *already is* a dual system operating inside the CWB, and the CWB created it, each time they gave permits for some producers to sell their barley, outside the CWB.
    [See link provided below for Ag Committee meeting this Oct]
    Some feed mills are already going directly to the producer…bypassing the CWB, with the CWB’s knowledge, and blessing, one presumes.
    Some producers seeking this opportunity, equal to their neighbor’s, to sell their own similar product have been denied by the CWB.
    The vote to retain single desk is a farce, when the granting of dual opportunity is already available. In law, does it not go to having set the precedence?
    cmte.parl .gc .ca /Content/HOC/committee /391/agri/evidence/ev2446409/agriev23-e.htm#Int-1726703
    “Ms. Carole Husband: There is already a dual marketing system in place. I gave you the number of people who already bypass pooling and board marketing. For instance, a feed mill can come to our farm, buy grain, take it back, make feed out of it, and export it with a Wheat Board licence. The Wheat Board could have chosen to tell the feed mill it couldn’t buy directly from the farmer. The Wheat Board could have said, “I’m going to buy the grain from the farmer and then sell it to the feed mill.” Instead, the Wheat Board lets the feed mill bypass the board completely.
    You need an export licence when you export, so a lot of feed mills right across the country are going out and buying grain directly, bypassing the board. Millions and millions of bushels are already bypassing the board, yet I understood in your comments that it would destroy the board. It hasn’t. It’s happening now. They totally bypass Wheat Board pooling and marketing.
    When we went to the Wheat Board and said we wanted a permit they gave us one. We don’t go through the pools. We don’t go through their marketing. We get a licence just the same as Quebec does. When Quebec or Ontario want to get an export licence to sell their products, they have to apply to the board. They get a licence and they export.
    I told you about my barley. I applied to the board, got my export licence, and went across the border. When Mr. Charles applied they said, “No, you can’t have a licence. You must sell it to us.” So some people are getting licences and other people are not. That’s what you call dual marketing, and it’s happening right now. It’s just that perhaps you’re not aware of it.”

32. Larry, thanks for adding a profession opinion here. I very much appreciate that as compared to the partisan rhetoric.
    It’s very interesting that this conversation is populated with numbers and verifiable facts.
    Long live the blogosphere.
    Cheers,
    lance

33. 1974 was an extremely important year for prairie farmers in another way. That was the year Raymond Sommerville beat the CWB in the Supreme Court. The CWB had charged Sommerville for feeding wheat he had grown in Saskatchewan to his cattle in Alberta without a CWB interprovincial licence. On the face of it, Sommerville was blatently in violation of the Act, but the CWB ruled that producer grain is agriculture and not trade and commerce and therefore outside the jurisdiction of the CWB.
    So when did we get the off-board domestic feed grain market? You guessed it…1974. And even limited to within Canada, this freedom has been great for many prairie grain farmers.

34. All I know is that a Royal commission recommended that western farmers be paid thirteen billion dollars for the elimination of the Crow.The Sask Wheat pool and the farmers union said”its not enough”.So the govt said “we will give you seven billion” and the Sask Wheat Pool and the farmers union said”its not enough”.So then the govt said “we will give you one point three billion” and the farmers union and the Sask Wheat Pool said”thats more like it.We really showed those politicians how to negotiate”.

35. The number that Jean Luc Pepin told me was 13 B.
    Today, Wayne Easter is a hero – mug shots on the steps of Parliament.
    Goodale gets MP of the year.
    Who is accountable?
    Only in Canada – where idiocy is rewarded with lifelong trips to the trough.
    Who will be accountable when the WTO mothballs STE’s?

36. LB, not that it matters, but I can honestly say I do not remember you being director of ops, doubt if I ever wondered who it was.
    Why(who) “viewed” stoon, crush plant, as the new price discovery ?
    Why did they not see it as wrong from the beginning ?
    I remember a few collapses. Was the June 94 contract fiasco the one that would have bankrupt UGG ? so instead they forced liquidation ?? and many producers lost a bundle ??

37. “But he skews the numbers to say that those that didn’t vote support dismantling the wheatboard.”
    Did I say that? Nope, don’t think so. Just kinda wondered how non voters would have voted had they taken the trouble mail in a ballot. Guess they figured it wasn’t worth 51 cents one way or the other.
    Besides, I don’t want the CWB dismantled. I just want to see farmers have a choice, and for those who want to have a selling agency with price pooling to have that as well.

38. Why(who) “viewed” stoon, crush plant, as the new price discovery ?
    The committee struck to develop a new contract were made up of members who owned the WCE. The committee was facilitaed by Dr. Larry Martin.
    Why did they not see it as wrong from the beginning?
    Who were they designing a contract for? Farmers..don’t think so.
    Was the June 94 contract fiasco the one that would have bankrupt UGG ? so instead they forced liquidation ?? and many producers lost a bundle ??
    I need files I have at work. UGG was a minor player thru Continental Grain. SWP was the major player.
    Farmers should not have been in the cash month to begin with. The should not have lost bundles in the June 1994 contract. It did affect other contracts, I agree.
    Here is a good piece written by one a student:
    http://www.agecon.ucdavis.edu/uploads/course_pages/cid_185/darren.pdf
    FYI: Colin Carter is from Davis and authour of Continental Barley Market.
    SWP “donated” $250,000 to the WCE investigation into the June 1994 futures contract with no admission of guilt.
    Send me an email in the morning – i’ll keep you reading for a week.

39. There are 2 eligible voters at our place and when the voting packages arrived one was taped shut and the voting envelope was missing. We phoned, they called it tampering and replaced it, but makes you wonder how many of those there were.

40. Back when rapeseed was starting to become a major crop with good prices, there were farmers in our area that boasted that they would never grow that weed. They also said that they would never grow any grain that the CWB does not market. Nowadays, those same farmers are growing canola for cash flow to SUBSIDIZE the BS marketing lunatics that CWB employs. Most of these farmers do not realize it, but that is exactly what they doing. Subsidizing an inefficient, cumbersome, slow anachronism from the dark ages of grain marketing.

41. Were on SHERMANS PLANET and the QUADROTRIKIKELLIE is infested with TRIBBLES

42. All I wanna know is the CWB open to be audited by AG? Did it go through?

43. Len at 8:14 PM said,
    I don’t want the CWB dismantled. I just want to see farmers have a choice, and for those who want to have a selling agency with price pooling to have that as well.
    That is the crux of the issue, and the reasonable middle ground that Larry W. has been talking about. On the extreme sides of the issue you have those who will not admit that there can be middle ground.
    The left side uses the scare tactic that there will be no CWB if farmers are allowed to sell their own grain. They are right, the CWB will not exist as a forced monopoly, it will look and act differently. The far right wants the CWB completely destroyed They are wrong, as there is room in agriculture for a voluntary grain marketing organization.
    Given the choice, farmers will chose the marketing option the best fits their farming style and marketing expertise. For some, pooling their grain (not only wheat, but other grains as well)with others will be the proper choice. Those farmers who choose to spend the time and effort to market their own product should be rewarded for their efforts.
    Unfortunately this debate has again been hijacked, mainly by the NDP, NFU, and other left leaning organizations. Choice is a scary word to our left leaning friends because it means that they will loose control of something that they had no right to control in the first place.
    It is truly unfortunate that this debate, especially in Ottawa, has descended again to the gutter level. But one only has to look at which parties have caused this to see where the real problem lies.

44. @mbaron:
    Re: “democracy isn’t six people in a lifeboat voting to eat the seventh”
    While I agree with the sentiment about that situation being undesireable, the above quote is actually a very good summary of how democracy works and incidentally why the CWB deserves to be scrapped.

45. Rumour has it shredders are in transit, heading to CWB Headquarters. Can’t verify…but….

46. So eastern paul, is that a yes? I can’t wait for the bouncing bunny easter to hip hop around his desk tomorrow. I bet the sredders are humming and the bunny’s bunnies are hopping if the AG is on her way. Makes my day if it is true.

47. People give your head a shake. A CWB II will not be anything more than a broker (sorry Larry). By having the only storefront for Canadian Grain being the CWB or its’ agents, then the farmer has the ability to capture any premium that is available for the Canadian Brand of wheat, durum and barley.
    If you have multiple sellers of Candian grain then any premium for the brand will either a) pad the bottom lines of Grain Companies or be bid away competing for the same sale.
    You have to remember that in the USA they have free enterprise “American Style”, where the government gives them a floor price. Canadian farmers so eager to enter this circus would would be flying the trapeze without a net. The Americans have a net, a safety harness and two senators per state ensuring it stays in place.
    By the way I have shipped grain to the US via CWB permit and I ship special crops around the world to more than a dozen countries annually so I know alittle about international marketing.

48. So there is no middle ground.
    What concrete proof do you have for:
    1) By having the only storefront for Canadian Grain being the CWB or its’ agents, then the farmer has the ability to capture any premium that is available for the Canadian Brand of wheat, durum and barley.
    2) If you have multiple sellers of Candian grain then any premium for the brand will either a) pad the bottom lines of Grain Companies or be bid away competing for the same sale.
    _______________________
    I’m watching the Americans bid away their premium this morning on export wheat. Their DNS 14.0 is $1.16 a bushel higher than the CWB November PRO 1 CWRS 13.5 at Great Falls, MT. And they don’t even clean to our standards.
    Whats with that?
    When you are shipping your special crops all around the world – is it your own grain or other farmers?

49. Lorne,
    With respect, it really doesn’t matter what the new CWB would look like. The premis behind the present CWB is simply wrong.
    By forcing farmer A to pool his grain with yours, without his permission, is simply wrong. If farmers voluntarily want want to pool their resourses (ie. grain) to achieve a real or perceived advantage then have at it. But what gives you the right to compell farmer A to allow his grain to be pooled with yours, without his permission?
    Saying that your price will be lower, or that you will lose perceived market premiums or whatever is not an acceptable answer. If farmer A sees no advantage in pooling his grain with yours, then you have no right to it.

50. Larry are you accounting for quality differences in the grain. Canadians have markets that our grain is well suited for and there are customers that prefer DNS 14.0. It is like saying the customer that buys yellow peas would substitute with greens.
    Regarding the special crop marketing, I do market mine and other farmers special crops. But I am not posting today on behalf of my company. My point is that this exercise is not something your average farmer is going to attempt. There have been comments in the media about farmers marketing their product over the internet and so on. This implies that they can acheive premiums this way, which is of course ridiculous.
    Let me ask you what proof do you have that if there is a premium for 1 CWRS 13.5 that a farmer will see any of it. My argument, and you have to agree, is that farmers have marketing clout through the CWB and once that is lost it can not be regained. I don’t argue that the CWB is perfect in its’ present form but it has come a long ways in the past ten years. I prefer to work for changes to timing of delivery etc. within the CWB rather than throwing what we have away.
    On my farm we grow all crops and in fact in 2005-06 I grew 1% of the canola grow in crop district 7a. This year I saw the futures price of canola rise through the summer and all of the rise was eaten up by the basis. I had no control over that.
    Currently I have enough grain bins for about 70% of my harvest. CWB grains move off the combine with no concern about price. If the CWB is dismantled I am going to become a grain bin dealer. All farmers will have to build more bins because you will have to store the grain to time your marketing. I know Larry will tell me to sell the grain and buy the paper but until we get a greater trading volume in the markets they are too thinly traded for my liking. If there was a more valid way to deliver against a futures contract we could bring alittle more reality to the markets.
    When I look at the range of crops that I grow, and some years I grow as many as eight, there are few that have as little upside to them as wheat. This isn’t the CWB’s making, it is the reality of world markets which won’t change no matter who markets them. If we can’t brand our grain then it becomes generic, worth no more than the next competitor.