Larry Weber, from Weber Commodities;
The CWB Election is in the books for 2006. Four candidates for the single desk emerged victorious with one candidate for pro choice winning the other seat. It is apparent that fear and rhetoric are alive and well in western Canada but one must respect the voters who did manage to take the time and mail their ballot in.
If this was only a vote on the single desk and that is what it will be portrayed as, the break out will look like this: District 1 at 56.4% in for a choice candidate with 43.6% for the single desk. District 3 was 66.2% in favour of single desk versus 33.8% for pro choice. In District 5, 59.2% voted for single desk while 40.8% voted for choice while in district 7, 55% voted for the single desk and 45% voted for pro choice. In the Manitoba District 9, 65.9% voted for the single desk, while 34.1% voted for choice.
The former Canadian Agriculture minister, the Hon. Otto Lang was on my radio program on the weekend. It was apparent that nothing has changed in farm policy debates. In 1974, when he wanted to change the CROW rate, the resistance to change was so strong that he backed away. He also said on the weekend that his biggest regret was not following through on the Crow change. The number that he used on the weekend in 1974 was a $7 billion dollar payout. It had Cabinet approval.
The fear mongering continued for 20 years – rhetoric flew, and farmers ended up with $1.3 Billion dollars. Because farmers were lied to by farm groups, corporations who were not ready for change, it cost farmers monumentally. The dollar amount is bad enough; however, it was 25 lost years that hurt the western Canadian economy the most.
The Western Producer of the day, the NFU, the Pools, WAYNE EASTER was the President of the NFU from 1982-1993 all said that it could not change, but it did. Wayne Easter fought vigorously to oppose the payout of the CROW and WGTA. Otto said on the weekend that the after a change he made to quota allocations in the 70’s the NFU issued buttons that said Otto Lang is 4 letter words (I’ve also seen one that said HANG LANG) and that the NFU was going on and on about he was going to kill the family farm. Nothing has changed.
Enter the Pools. Otto said the CROW had become sacred. So much so that people forgot where it came from and what it represented. Media can do that. Organizations with ulterior motives can do that. And today when Wayne Easter stands with the Leader of the Opposition and the President of the CWB, everyone forgets what he did to the western economy. For the majority of farmers, it is like nothing happened and all is forgotten.
A line that I like and use is this: Those who do not study history are bound to repeat it.
The next time you see a politician, elected official or organization standing up for farmers, please ask yourself three questions:
1) What proof do they have to take that position?
2) What is in it for them?
3) Does this sound like the CROW/WGTA debate?
For half of the CWB districts, you had a vote on nothing but rhetoric and fear. And the rhetoric came from both sides. Demand better. Demand proof. Demand accountability. You are the CEO of your farm. You would not make a decision to buy anything without facts. You are accountable to your family who are your shareholders.
Remember the only one that is looking after you is you – no one else gives a damn. And if you ever want a refresher – take a look at the CROW/WGTA debate.
Ken Beswick, the now deceased former Commissioner of the CWB, may have been right. This industry does deserve itself.
Larry hosts a weekend agricultural radio program that’s both informational and highly entertaining. He can be reached by email here.
In the “World of Wonder” category, Jack Layton’s pronouncement on the CWB elections, and Chuck Strahl’s planned plebiscite on barley marketing: “I believe the wheat board elections show the Conservatives are arrogant and dictatorial.. and they should begin to trust farmers to make their own decisions.” Except, apparently, the decision to sell their grain privately.
Beever
I hear this argument that all farmers who want “Marketing Choice” make that it is an abuse to their rights.
Lets look at this. What is it that farmers that want choice are looking for? Timing of delivery, control of cashflow, pricing? These are all valid points.
I think timing of delivery is the greatest valid beef anyone has with the wheat board. It is tough to manage cashflow with a large amount of board grains. I am an ex-banker and I can assure you that if you are a farmer today and you grow mainly cereals, … you don’t get it. You can not be crunching numbers or analyzing markets. I think the board is working on a project to swap delivery
periods to match up prferences.
That deals with timing of delivery and control of cashflow. The next is pricing. This one is precipitated by the look to the south. While there are some farmers within 200 kms of the border that may have a shot at delivering into that market, they are dreaming in technicolour if they think that option will be open in the longterm. I have trucked grain from west central Sask to the US in the early nineties via a CWB permit into the US market to arbitrage a situation that was taking place and freight bills at that time ran as high as $2.00 per bushel. Remember you can only load a super-b with 28 tonnes because of their bridges etc.
So to attract a better price you have to “receive” it from a grain company or sell it direct yourself. When is the last time you arranged an ocean vessel or freight insurance or completed a bill of lading for a foreign destination or dealt with letters of credit from a foreign customer?? Get real.
CPAC is right this moment carrying the debate in The House on this subject.
In fact Carol Skelton,MP from Saskatchewan suggested that the opposition members go to Small Dead Animals blog and search out the comments.
She made special mention of Larry Webber.
Lorne: “So to attract a better price you have to “receive” it from a grain company or sell it direct yourself. When is the last time you arranged an ocean vessel or freight insurance or completed a bill of lading for a foreign destination or dealt with letters of credit from a foreign customer?? Get real.”
Um, there’s an entire business devoted to exactly those tasks: freight/customs brokers. What makes you think that information tasks such as those, in an internet world, wouldn’t pop up at competitive prices if farmers were free to make their own deals?
Hey Bean, if anyone can get me a Youtube style clip of that, I’d love to have it.
Lorne…
The reason you hear the argument all the time is because it is the basic argument.
Here is the simple question. Do I own my wheat? Or do I grow it “collectively” We have freedom of association in this country, and if I do not want to associate with my neighbour who grows wheat, or you, then why am I compelled to do so?
Don’t say it is because I’ll get more money if I do so, because that does not answer the basic question.
Even in the labour movement, I have the choice to use sell my skills in a “union shop” or a non-union shop. The choice is mine… not so with wheat.
Since CPAC viewers are no doubt reading this I would like to take this moment to reassure those viewers that there is no reason to have Sheila Fraser audit the Canadian Wheat Board and that rumours about the Australian Wheat Board, Claudia Rossett, and men wearing women’s underwear are speculative and without basis in lingerie.
Lots and lots of bins !! That is what ever farmer should have. Be in control of your product. And do not advertise the size of your inventory. Keep them guessing. Nothing gives more pleasure than nailing the paper longs at the top with physical delivery, when all thought the bins were empty. The last few decades the Farmer has given up that tool by signing production contracts, DDs, basis contracts, ect, thereby tiping his hand even before he puts the seed in the ground !!
If you ever hear of a govmit plan to build storage and call it reserve, liquidate the farm and head for the hills. It would be a big bear hanging over the market, a la USDA.
LMAO… Gerry Ritz is complaining that people who made a marketing choice with feed barley are being locked into their choice. (feed can be sold off board too)
If you sign a contract with a company, in this case the CWB, for a cash advance you are forced to deliver there and that is wrong? Its like any other contract with any other company…. Except most of them won’t give you money up front before you make delivery.
Even funnier now he is complaining that the US has a different grading system which results in the dumping charges.
I wonder if he knows that it is the CGC and not the CWB that determines rules for grading.
Beever
I suspect that you say you have choice in the labour
market you have choice because you know up front what type of shop you are signing up for.
Did you not know about the CWB when you started grain farming?
You have a choice to grow board grains or not, or work in a union shop or not.
Basdically my argument is have a vote winner takes all and get on with it.
Lorne:
Thanks for taking the time. There has to be a medium between throwing farmers in jail and the mess we are in today.
15% of the right and 15% of the left are getting all the airtime.
What is the solution? The left won’t budge. The right won’t budge and who gives damn about the farm? Really, who does?
Lorne…
With respect, the vote idea sounds good, until you try and determine who is eligeble to vote and what the question will be.
Pro CWB people want the vote to be a choice between the status quo CWB (monopoly) and the elimination of the CWB altogether.
Pro choice people want there to be two options (maybe 3), status quo monopoly, or a voluntary wheat board, and perhaps the elimination allogether.
I really don’t see a vote on either question putting an end to the argument, although I think we would both agree that this endless debate achieves nothing.
I come back to my original question of do I produce grain collectively or do I own it. As for the labour market, none of us would like to live in a society where the government mandated that you could only have union shops for a given occupation. (except perhaps Jack Layton and Buzz)
“The left won’t budge. The right won’t budge and who gives damn about the farm? Really, who does?”
… the libs don’t really care, the dippers don’t really care, the cons don’t really care. That leaves the Grain companies who don’t care and the CWB who doesn’t care.
Just the farmers you say? So lets run the farm like a business rather than an ideological pawn. What gets me the best return for the least work??
On my farm (for today) that is the CWB by a few bucks. not many. but I don’t have to do the marketing work to get the price either. and that is expensive.
—-
Lol, Anita Neville just used fear and smear on 400 jobs losses in Winnipeg.. which is almost a bit of a percent of the Winnipeg labour market. What if cargill can do it with 5 jobs?? (Then the CWB is inefficient maybe??)
Beever,. you mean like Healthcare?, Education?, Ag Canada? City Employers? etc.
I still don’t understand the choice/CWB debate on how the CWB survives in a dual market.
There is no CWB in a dual market. It becomes a cargill, an ADM, a JRI, etc. It is free to choose any structure just as any other company.
But tell me how a pool structure would work without the monopoly and why hasn’t it been done?
Tell me how a company with no port space and no bargaining chips gets grain to export markets??
Tell me how that company with no delivery points takes delivery of grain that it can no longer ship??
Larry
Here’s one for you, the change of the crow has hurt everyone that grows grain and exports it. We were supposed to be met with many value added opportunities and the growth of the livestock sector. The livestock industries grew because feed became cheaper.
I see the rationale for the change and in fact I was a big proponent of it at the time, but lets say freight increased by $20 per tonne, it costs me $120,000 every year.
I see now the problem with trying to value add to every bushel is that it doesn’t change the reality that we are still half way around the world from most of our market and there are lots of competing countries that don’t need the wages we do to live. Therefore when they get their act together, Bam there goes our market.
In the world of high fuel costs it sucks to be this far from the market. Also our product is in transit much longer than our competitors, so lead time for buyers is so much greater.
I say these things so the average Joe Farmer doesn’t have any illusions about the challenges of
marketing.
Larry
You are right that the media covers only the extremes. But farmers have to take the time to educate themselves and inform themselves. This does not mean go to the NFU or Wheat Growers website. If you gain some understanding about economic theory it gives you a basis to understand implications of policy change.
I am really ticked that they consult the neophytes at the Wheat Growers as experts in the field. I know some of those people and they are still wet behind the ears and know not of what they speak.
I have never voted anything else but Conservative, Reform and Alliance. I was even asked to run once federally. I am mostly p***ed off the way they are handling this. If there are changes to the CWB, I will live to farm another day or 20 years. But it doesn’t mean I won’t voice my opinion and have it heard.
Thanks for the sharing of opinions.
OK, here are my questions.
1) If the CWB is such a wonderful marketing tool for farmers, why are farmers east of Manitoba not beating down the door to get some of this?
2)If the CWB is such a wonderful marketing tool for farmers, why are farmers not fighting to get other crops like canola, mustard etc brought under the control of the wheat board?
I suspect the reality is just that western farmers have not had to market their wheat for so long that they really have no idea how to do it, and are scared that they will lose out. But that is what the DUAL market idea is all about. Those old dogs who are afraid to learn new tricks can hang on to the CWB. And it probably will improve the situation for those farmers as well, because the board will have to work harder to prove their worth.
And as far as this being Ottowa proclaiming their dictates from afar, remember that the MPs working hardest to keep the boards monopoly are from Ontario, Quebec, and the maritimes, where the CWB is the competition to their farmers. That says as much about the “value” of the single desk system as anything.
Barcs…
Medicine..If I’m a nurse or a doctor I can work in a multitude of places.. Education I can use my skills in a multitude of places, Ag Specialist. Engineer… same thing. All occupations are the same.
It’s funny that the most profitable retailer in Sask happens to be a voluntary co-operative, that competes in the world of multi-nationals and global players by giving good value to those who choose to patronize it. People choose to buy from them, not because they have a monopoly, but rather because they give good value to their customers. Their return to the membership is not too bad either. If they did have a monopoly, would they be able to extract a premium price? I doubt it. The buyers would simply go elsewhere.
Canada is not the only country in the world that exports wheat. The new CWB will have to learn to live and prosper in a new set of circumstances, and I have no doubt whatsoever that they will ultimately do just fine.
“Medicine..If I’m a nurse or a doctor I can work in a multitude of places.. Education I can use my skills in a multitude of places, Ag Specialist ((I said Ag Canada)). Engineer… same thing. All occupations are the same.” ——– Try working outside a union shop in one of those…. Not in Canada
How Beever?
The CWB has no deliver infrastructure (no elevators). They have no port space to ship out of.
They have few assets with which to buy or even finance such an infrastructure.
How to survive at all let alone prosper??
Barcs,
I have a sis-in-law that works as a nurse in a non-union environment and gets paid very well, I have another sys-in-law who has 2 education degrees and works in a non union environment, all in socialist Sask.
Correct, the CWB has no infrastructure, but neither did Dreyfus, until several years ago, who was one of the largest physical exporters of Canadian grain. I had the privelege of sharing a meal with the V.P. of Dreyfus about 7 years ago, just as they were starting to build in Western Canada who told me the story of their operations. Lack of facilities certainly never stopped them from exporting. BTW, they did it with an office staff of 11 persons.
Life will go on,when the CWB monopoly is gone. Farmers will plant, harvest and sell their grain, to whomever they want. That is true freedom, and that is what my Canada is about.
Beever
You say the new CWB will do just fine in the new set of circumstances, and yet you argue they are doing a crappy job now. Seems pretty inconsistent to me.
Lorne..
They will do just fine for those who choose to use them. Who knows, maybe they will be even better.
No one has answered the basic question of does a farmer own his wheat? Or does grow it “collectively” with all the other farmers large and small?
The inconsistancy in the argument if from those who say that their rights will be infringed upon if the monopoly is gone. There is no inherent right in this country to compusory “single desk marketing”. I have no problems whatsoever with voluntary co-operatives and associations. But forced collectivism, is not my vision for this country. There is another term for it.
With all due respect:
The CWB has been able to study grain companies for the better part of what …75 years?
If they do have support of 60% of the farm, that translates into an enormous amount of grain.
They need to think like a grain company – not a monopoly.
This system is so overbuilt, grain companies will be bidding on the CWB’s volume of grain – just to survive! Someone could make a living selling knee pads of the front door at 423 Main.
Not only at port position but in the country. Look at the tendering process. Yes they need some capital – how much – 1.5 Billion – 3 billion – whats the number.
The Feds should give them the capital. The Gov’t guarantee has a value. But farmers will keep debating the value of the CWB and get nothing for it – see the CROW.
Take the money and build a company that WILL work. Pouring cement sentinels in should be over. Capitalize on other companies mistakes.
Louis Dreyfus operated in this country for decades with no facilities as a previous poster suggested. Ditto A.C. Toepher.
Parrish has no facility in Vancouver and probably makes more money than the #1, 2 and 3 grain company combined.
So don’t tell me they “can’t”. My three year old says ” I can’t” and I tell Hunter, why don’t you just say “that you don’t want to”.
All the fear mongering about Cargill, ADM and multinationals is BS. They could care less. Wayne has been using that line since 1973 and its frikkin tired already.
Having been inside a grain company, I can tell you market share and profit are paramount to staying in business and your job.
Buying low and selling low won’t keep you in the black or groceries very long. That’s why i don’t buy into the multiple sellers fear mongering.
To keep your market share you have to buy high and sell high when product is required. You would be amazed at what happens to sales people when their bonus is tied to profit.
There is another term for it.
BOHCA – Bend Over Here it Comes Again.
LOL…with sand or KY, Hayseed?
LOL…with sand or KY, Hayseed?
Whichever fetches you the lowest price from the CWB.
Larry
I am not fearmongering as I know businesses need to make a profit to survive and deserve a profit for services rendered. However if you were building a system from scratch and you were handed the mechanisms to put in a monopoly, I know any rationale businessperson would grab the opportunity and run.
I know what you’re saying about selling high, but when you buy, you pay just enough. I do it all the time, as do everyone of the companies to which you broker grain. I know of no business that pays more than it has to for any input just to be good guys.
Again I don’t blame anyone, I just think if you examine rationally both systems and say which works best for the farmer,… multiple sellers isn’t the model.
I had a conversation with a friend today and he mentioned that the CWB offered documents as exhibits in its court battle with the government that supposedly show CWB benefit for the farmer. They might be interesting reading for both sides.
Larry, you know the grain business and how companies aggresively position themselves if they smell blood from a rival. It occurs to me that, they don’t play Santa Claus with the customers very often.
You talked about nobody on either side of the debate really caring about farmers, that job gets left to each one us. CWB or not.
Here’s the address for the CWB application against the government. I haven’t read it yet. It would be good for both sides of this debate to read.
http://www.cwb.ca/public/en/hot/judicial/index.jsp
In this arguement something is being ignored and that is the fact that our yields have been limited by the CWB’s insistence of the type of wheat that we can grow.They insist that #1 northern must be our base as it was 60 years ago so that we can get a premium for our high quality wheat.What they seem to be ignoring is that a goodly portion of the world now eat non leavened bread.So it turns out that we get the right price in some specialty markets and sell at a discount in the non leavened world.
Market Place Discipline, Marketing Power, Fee Schedule, Industry Association, .. whatever you want to call it.
How sucessful with haggling are we with;
Dentists
Chemical Companies
Lawyers
Fert cos
Pharmacies
Rail cos
Surgeons
Milk
Turkeys (human kind also)
Fuel
Do I agree with “putting-on-the-squeeze” ?? not really. But if one wants to make $$$, best to be in the low # of sellers group.
Is it possible for thousands and thousands of G & O seed Farmers to exhibit market discipline ?? Never. Is your product the most esential item to Mankind ?? Absolutely. Nothing trumps it, not even health care.
That is why govmits of the world will never leave food production entirely to the market place. Even the USofA has the USDA, the biggest Bear in the market.
The CWB “could” have discipline, “if” it wanted to, and “if” the politicians ok-ed it, and “if” the citizens wanted higher food prices.
Otherwise, build lotsa bins and don’t disclose your inventory #s.
” the CWB offered documents as exhibits in its court battle with the government that supposedly show CWB benefit”
It is the same drivel from the same people over and over again…sorry there is nothing new in there.
We will agree to disagree on multiple sellers.
Yesterday the difference in Great Falls, MT was $1.16 a bushel. The difference for FEED wheat in France was $1.12 a bushel. Take off transportation costs and you’re still short.
Why is it I can go to Reuters and find what everyone else in the world is selling wheat for including Cargill, ADM, and the horrible Multi-nationals?
The US farmers is subsidized to the tune of $Billions$
The ‘biggest-bear-in-the-market’ USDA has a budget of $millions$.
The US taxpayer foots the bill to keep US farmers in the money.
Do we honestly think the US govmit will allow Canadian grain to freely flood across their border, and allow Kanucks to get rich ??
Can you say mad-cow scam ?? The US cattle farmer is now so well heeled he can withstand “fair” competition from us economically-beaten Canuk Cows for decades to come.
Not that I agree with the policy, not at all, but govmits of the World think food supplies are far too important an item to leave to the market place. The only country in the world that it might be, is the USof A. USDA is a player(skewer) in this market place ?? ah, think ??
Agriculture Canada, Manitoba Department of Agriculture, Sask Ag, ect have budgets of Millions$$. The govmit says they are there to provide a service to farmers. Oh ?? Do we see farmers there on a daily basis, asking how deep to seed and when they should market their grain ??
So why are they there then ?? IMO, to provide a ‘window-on-the-industry’. So the politicos and civils can fine tune the economic health of food producers.
WGSF taken away. Worked TOO good. NISA, GRIP, AIDA, CIFP, CAIS, .. haven’t got it right yet. Too rich, too poor, not enough inventory control, may need sight gauges on the bins.
Boy! It is not just Calgary or even downtown Calgary, must of this blog seems to seep out of one bar.
Hi all!
Bye