Western Canadian Wheat Board

[RoperAB]

Since it looks like we are getting rid of it, what are your oppinions?
My impression is that it was a good outfit originally but like all beaurocracys it got to big and forgot about its original mandate.
I would say get rid of it. However since I get the impression that the Americans want us to get rid of it. Well frankly this bothers me. If they want us to get rid of it im thinking its not because they want to help western Canadian farmers.
Am I being cynical?
Can the wheatboard survive if it doesnt have a monopoly?
Is this just going to put the last nail in the coffin of the family farm?

 

[DiamondSCattleCo]

People who want to rid the world of the Western Canadian Wheat Board obviously have never, ever read about the 2 other times it was abolished, nor the time we had dual desk marketing in Canada.

Long story short: Worldwide grain prices plummetted, not just Canadian grain prices. Farmers lost their unified voice, and it turned into an ugly free for all in which small (and large for the time) producers got taken to the market.

The Canadian Wheat Board is in dire need of revamping and a return to its original powers, however it'll never be allowed to return to its glory days when the directors actually had full run of how the grain was marketed and when.

I don't imagine anyone remembers this, nor has even read about it, but a great example of how the wheat board used to be run for the benefit of all producers world wide. I can't recall the exact year, and don't have my original Canadian Wheat board text as it was burned in a fire, but for a period of two years the world was suffering from extremely low grain prices. The Wheat board was buying at a substantially enhanced initial price, and simply stock piling it. As grain prices began to come back a bit, helped by an overseas draught and a rebuilding of post war time Europe, the wheat board began to make deliveries. Not dumping, but well planned out deliveries that still allowed the grain prices to recover. The federal government of the time decided this was unacceptable, and ordered the board to dump all stockpiles, which drove prices into a tailspin. Opponents use this example of why the board should be eliminated, however what it was was a prime example of how much power Canadian grain farmers have on the worldwide market, especially when that power is exercised properly.

Rod

 

[elwapo]

Only in communist countries do they throw people in jail for trying to sell their own product. The wheat board was set up during ww2 to prevent the western grain growers from controlling food suplies. With the cost of transportation the way it is now we should be sending processed product to the east not raw grain. The wheat board has to go!!!

 

[DiamondSCattleCo]

The Wheat Board was set up in 1919, not after WW2. It actually has its roots in the Grain Growers Grain Company, established in 1905. It was also set up, not to control western producers, but rather to eliminate the captive supply and railroad grain company hold on the west. It was disbanded during (or just before, lousy memory) WW2, then re-enacted shortly after WW2.

While I agree we should be processing more product in the west, how is the wheat board stopping that? And more importantly, how is disbanding the wheat board going to convince processors to move west? What you're advocating is eliminating the one thing that allows grain producers to have some kind of voice, while not giving us any market outlet for our raw product in western Canada.

Rod

 

[Econ101]

I am afraid you will be thrown into the world grain market with the real control resting in the likes of ADM, Bunge, and other big buyers.

Europe still has their farm subsidies. They still want to dump their commodies on the world market. They don't want their farmers to lose the ability to profitably raise food. Why should they? They have had periods when they have been short on food and don't want rely on others to have to feed them, even if short run costs are lower.

I don't know about your wheat board, but down in the US, you can't trust the regulatory agencies to do their stated jobs. Too many paid off politicians.

 

[Econ101]

U.S. and European Subsidies and affects in 2002 article:

6/17/2002 Raising Farm Subsidies, U.S. Widens International Rift - 6/16 NY Times

Portrayed by its supporters as a necessary safety net for farmers and by its detractors as an election-year welfare program to win Midwestern votes, the huge increase in subsidies has become an overnight magnet for America-bashing.

Javier Solana, Europe's foreign policy chief, declared in Madrid this week that the new American agriculture policy has created the "most profound" division between Europe and the United States, worse than disputes over steel tariffs, the Kyoto environmental treaty or the international criminal court.

In Washington, in an address to Congress, Prime Minister John Howard of Australia said on Wednesday that the only problem between these closest of friends was his country's "intense disappointment" over the $180 billion farm bill.

In Rome, at a United Nations conference on hunger, developing countries pointed this week to the huge new subsidies to American farmers as one of the biggest obstacles to creating vital opportunities for their own farmers and enabling them to climb out of poverty.

With Mr. Bush pressing other countries to knock down their trade barriers and expand open markets, his approval of an 80 percent increase in farm subsidies — with all the advantages that confers on American grain exports — is viewed as a move in the opposite direction.

Poor countries say the subsidies also work at cross purposes to the administration's avowed desire to reduce poverty and to diminish foreign anger against the United States.

In a private letter to Congressional leaders, a group of countries known as the Cairns Group, which includes Australia, Thailand, Canada, Brazil and Argentina, wrote this month that "the sheer size of the subsidy package will inevitably hurt farmers around the world, particularly in developing countries."

"The United States should be sending a very different message," wrote Mark Vaile, the group's chairman.

The heart of the dispute is that by underwriting its largest farmers, the United States is flooding the world market with inexpensive corn, wheat, rice and soybeans, which are sold at half what it costs to produce the grain. That leads to artificially low world prices, which in turn undercut grain produced by farmers in countries that do not give subsidies. The grain market becomes distorted, domestic markets are ruined for producers overseas and their chances of making inroads into foreign markets are reduced.

"Subsidies and other measures applied by the world's richest countries continue to increase exponentially," said Navin Chandarpal, Guyana's minister of agriculture, at the Rome conference. "We continue to be pressured into further opening up our markets, without any regard being paid to the welfare of our farming and rural communities as a whole."

Development experts agree and say the effects ripple throughout developing economies. "American farm exports drive down prices paid to local farmers, reduce rural family income around the world and push farmers off the land and into overcrowded cities," said Mark Ritchie, president of the Institute for Agriculture Trade Policy, a nonprofit organization in Minneapolis.

However, some developing countries with sufficient foreign reserves prefer to import cheap American food as they build up other sectors of their economy.

Despite the complaints, the new American farm policy also conforms to the current rules of the World Trade Organization. Indeed, the United States is not alone as a wealthy country that gives generous welfare programs to farmers. The 15-nation European Union is notorious for giving lavish subsidies to its seven million farmers.

In an address in Germany this month, Robert B. Zoellick, the United States trade representative, defended the farm bill and suggested "respectfully that America-bashing will not promote the E.U.'s enlightened self-interest.

"When Europeans criticize the recent U.S. farm bill, I wonder how many are even aware that U.S. agricultural tariffs are less than half of the E.U.'s," he said.

Disputes between the world's major economies — United States, Europe and Japan — over farm subsidies are nothing new. But the latest American increase, European Union officials say, comes as they are trying to reduce their own payments.

With plans to admit 10 new countries — including Poland, where nearly one-third of 40 million inhabitants identify themselves as full- or part-time farmers — the European Union says it must slash expensive programs to support agricultural production and give more money for conservation and rural development.

Critics of the new American policy say that, by giving in to the domestic farm vote, the United States will have a difficult time persuading other countries to open their markets to American agricultural products.

"The American farmers have shot themselves in the foot," said C. Fred Bergsten, director of the Institute for International Economics. "The long term growth of U.S. agriculture is clearly in foreign markets, particularly the rapidly growing emerging markets. That requires liberalization and access to those markets. The farm bill undercuts our ability to reach those markets."

During the debate on the farm bill, lawmakers in Congress painted a different picture, arguing that American farmers needed subsidies to remain competitive in the world.

America's main competitors on the global grain markets are not the European Union countries but countries that pay few or no subsidies to farmers and indeed may even tax food exports to earn more government revenue.

During the trade negotiations at Qatar six months ago, members of the World Trade Organization agreed to remove barriers to farm trade.

Mr. Zoellick insists that the United States remains committed to the goals worked out in Qatar. But both the Bush administration and the European Union — whose dispute over farming is essentially one of their many trade battles over state subsidies — will be hard pressed to remove the barriers to foreign agricultural products without upsetting their powerful farmers.

"We're all free traders and we're all hypocrites," said Peter L. Scher, specialist on trade negotiations for agriculture in the Clinton administration. "I blame the Europeans as well as the Americans. If we're going to develop these poor countries, we've got to give these nations a chance to develop their own agricultures."


Related Link: http://www.nytimes.com

 

[elwapo]

rod
what gives you the right to tell me where and to whom I can sell my wheat?

 

[DiamondSCattleCo]

what gives you the right to tell me where and to whom I can sell my wheat?

I don't have the right to tell you where to sell your wheat, but I certainly have the right to guard my own interests, and in this case, the Wheat Board does that. Not as well as it once did, but its a far cry better than what we'll see with it gone. Would you rather be at the mercy of Bunge, Agricore, and the Wheat Pool, all of whom are only interested in their shareholders profits, and not necessarily in the bottom line of producers? It will end up just like the mess we're currently in with beef production, with only a couple real buyers and absolutely no voice in the industry.

I noticed you didn't answer my original questions, so I'll post them again: While I agree we should be processing more product in the west, how is the wheat board stopping that? And more importantly, how is disbanding the wheat board going to convince processors to move west?

Rod

 

[elwapo]

Why would the processors set up shop in the west if they pay the same for the product at the ports and the farmers pay to ship it to them.
Last time I grew malt barley it was a special variety for one of the major American brewer. I paid the shipping to have it sent to the Hudson bay because that's the way it works with the board. My delivery point is less than two hours from the Amercian border.
My point is that I should be able to sell my product at the farm gate and get the money in my hand, not pooled together to be distributed after the bureaucracy takes what it likes.
Do you think the packers would be set up in Alberta if the ranchers pooled all their cattle together and payed to send them anywhere in Canada?

 

[blackjack]

...there are feedlots as we speak trying to do just that elwapo...pool their cattle together so they hopefully can gather more market share...i think your being setup elwapo...but good luck...

 

[Big Muddy rancher]

I haven't held a Permit book for quite awhile. As far as processors, I can't sell my wheat direct to a processor i have to sell it to the CWB and buy it back costing about $6/tonne i think they said on the radio today then sell it to a processor. Ontario has a dual market system why not the west?
When the CWB was set up what was the communications like in the west and storage and transportaation like. Even the education of farmer.

 

[Maple Leaf Angus]

OOOWWWW HOT DANG - Big Muddy, did I just hear you say that something in the east is not all wrong? :wink:

Yes, dual marketing is working here and the Board is still thriving as well. It remains to be seen how long it lasts though. The board I mean.

I could be wrong, but it seems that the best prices are available off-board. HOWEVER, that could all change if and when the board no longer exists.

I wonder if the best system might be two systems, or dual marketing. It might take one to keep the other honest.

 

[Big Muddy rancher]

OOOWWWW HOT DANG - Big Muddy, did I just hear you say that something in the east is not all wrong? :wink:

Yes, dual marketing is working here and the Board is still thriving as well. It remains to be seen how long it lasts though. The board I mean.

I could be wrong, but it seems that the best prices are available off-board. HOWEVER, that could all change if and when the board no longer exists.

I wonder if the best system might be two systems, or dual marketing. It might take one to keep the other honest.

Yea the east has a choice and the west has to do what Ottawa say. :evil: :wink:

 

[blackjack]

...like mla says somewhere in the middle lies the balance...just my personal opinion the farm families that have stuck together have had more success than the ones where the brothers all went their separate ways... the system has ate alot of them up...its hard to imagine having better sales as individual farmers ...have we not seen in the beef industry international trade can be awful finicky...

 

[Big Muddy rancher]

I don't farm anything for sale. What I raise I feed.

Why have so many farmers gone to raising and marketing very successfully non board crops? They forward contract , hedge, lock in dollars ect.

 

[blackjack]

...if it has been so great ...the system would not have needed grip,nisa, now cais...but if you call that farming...i guess...

 

[Big Muddy rancher]

...if it has been so great ...the system would not have needed grip,nisa, now cais...but if you call that farming...i guess...

well if the CWB is so great why did we have GRIP<NISA, and now CAIS.


OH Yea do you remember LIFT.

 

[Northern Rancher]

Isn't LIFT what you do on your bronc rain-the more things change the more they stay the same-I imagine in my lifetime we'll see elevators being rebuilt in places we just finished tearing them down. I never have farmed but from talking to my neighbors marketing their own grain isn't always a day at the beach either-I still think most of your grain should leave your place as a hog or a steer but straight grain was a pretty easy lifestyle(comparatively speaking) for a few years back in the day.

 

[DiamondSCattleCo]

Why would the processors set up shop in the west if they pay the same for the product at the ports and the farmers pay to ship it to them.
Last time I grew malt barley it was a special variety for one of the major American brewer. I paid the shipping to have it sent to the Hudson bay because that's the way it works with the board. My delivery point is less than two hours from the Amercian border.

Livestock is a bit different than wheat, vis-a-vis shipping and waste. Even if the board were shut down and you could deliver wherever you wanted, the processors would still be out east. Why? Because thats where the market is for edible grain products. Its cheaper to ship raw material to the east, process and sell in their backyard than it is to process in the west, and ship the processed food to the east. Why? Because the processed food wastes more shipping space than the raw product. And who in the east wants to eat 4 day old bread?

While I understand, and somewhat agree with, your point about your product being yours and you should be able to ship to where you want, that means that a few producers will have access to certain markets, while the rest are left hanging. While it may seem like those few with market access are subsidizing those without access, you fail to realize how much power there is in keeping producers banded together with a single voice. Especially in the area of edible grain products. Its been a couple years since I've seen the stats, but as of 2003, Canada still supplied 51% of the world's edible wheat. Put that 51% into a monopoly, and you have incredible worldwide market power. You may not be able to touch, feel, or calculate the premiums you're getting, but they're still there.

Sure, I certainly agree with most when they say that the wheat board needs to be revamped. No doubt it does. Your point about shipping is definitely an area needing improvement. Originally, the single delivery point was developed so that high quality grains could be mixed with lower quality grains to make minimum quality requirements. Overall, it helped with price. However, with today's world of odd climates and inland terminals, I believe that appropriate blending could be accomplished closer to home. Then, for those producers who have access, such as yourself, you can at least save on shipping costs, while still maintaining single desk power. Its only fair to you.

The wheat board also needs to be more responsive to specialty situations, such as the one you speak of. The wheat board has never felt there was a benefit to handling specialty edible grains, however in this day and age of major premiums, I do believe they need to revisit those old decisions.

I would possibly support dual marketing, ONLY in the case of the above specialty grains. If the board can't do it well, then they need to bow out and issue specialty certificates. However, they are able to handle huge international volumes while throwing their market power around. Again though, our government needs to let them do this and not be concerned about the bloody WTO. If our trading partners don't care about the WTO, our government shouldn't either.

I would not support dual marketing of all wheat grains. All that will happen is the farmers will ship to whoever has the current high price. If the board's initial price happens to be higher than that days market price, the board will get it. Otherwise an independent will. It hamstrings the board, as they are then buying grains above market average price without the ability to stockpile and force world prices higher. So they end up losing money. In effect, you'll bankrupt the board, and we'll be back to no board grains and the individual producer will left to the mercy of the multinationals.

BMR, as far as GRIP, NISA, et al. you need to take a look at the prices of wheat versus non-board grains. While there have been swings in the price of wheat, you'll notice that the swings are not as aggressive as non-board grains. This market stability is worth its weight in gold for the average producer. And as NR says, marketing your own grain isn't a walk in the park. I'm comfortable with contracts and predicting market conditions, but grains still gives me a headache. Grain predictions are much more difficult than livestock, simply due to Mother Nature. While the old hag can have an effect on cattle prices, its not near the effect she can have on the grain market. If the wheat board was allowed to stockpile, like the example in the my first (or second?) post, they could easily help farmers ride out odd swings in the world price of edible grains.

Its only my opinion, but I think many producers are talking about elimination of the board as a knee jerk reaction to what are some correctable faults, without realizing just what kind of value the board still does provide.

Rod

 

[Big Muddy rancher]

NR, LIFT was the summerfallow program back in the 70's. We did get a good Texas gate out of the deal cause my brother-in-law was courting my sister so spent alot of time hanging around the ranch so dad put him to work welding up a gate.

Rod Down in the south we took offense to our high quality wheat not getting protien payments for years and not getting recognised for the quality it was yet it was used to improve the grade of wheat from areas of higher yields.