Letters to the editor – March 2, 2017

Posted

Trade trouble

Now that President Donald Trump is putting a kibosh on the Trans-Pacific Partnership trade agreement, commentators are stating the conventional wisdom that Canada and Canadian agriculture depends on trade.

Let us see how an economist would look at the place farmers have in all of this.

Economists notice companies involved in the food chain, from producer to consumer, can protect their share of the consumer dollar, and actually increase it by forming monopolies. Farmers can get the same monopoly protection by forming marketing boards. This creates a problem for industry, which needs a weak link in the food chain.

An example was when people were lobbied so (former Prime Minister Stephen) Harper disbanded the Canadian Wheat Board.

We also see this when clauses are written into trade agreements which can be used to force governments to shut down other farm marketing boards.

Farmers, the weak link, can then have their share of the incoming dollars from trade whittled away by industry.

The result? If we hear politicians saying farmers will benefit from trade agreements, we should expect they are standing in a manure spreader.

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For Canadian citizens in general, the worst part about the TPP and other trade agreements are clauses that allow industry to control governments. Around the world there are many examples where industry controls how democratically elected governments manage their country.

More can be said, but you are right, I do not expect the TPP or any other trade agreement will benefit farmers.

Lorne Jackson
Moose Jaw, Sask.

Elusive transparency

Many farmers are complaining about grain prices being offered this winter, especially for wheat.

It is hard to find a port price for wheat, but data from Agri Canada and Food states the average price this year is north of $8.60 per bushel at Vancouver and even higher on the world market, yet farmers are only receiving a little more than $6 per bushel at the farmgate.

Wanna-be market gurus point to the futures prices to indicate what farmgate prices should be. This is nonsense. Future prices do not reflect actual grain sale prices. They only reflect what speculators are willing to hedge or insure the small amount of grain not sold directly to end-use customers by the four or five big grain companies.

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It does not reflect the actual sale price of the grain and it certainly does not predict the future either.

The zealots who say the futures price serves as a price discovery mechanism are misinformed.

The recent trading violations against Archer Daniels Midland, whereby ADM “maintained ownership and control of the accounts on both sides of the transaction,” show a different story.

The process in which a trader buys and sells future contracts to himself or an entity he controls is banned under futures law. Yet the fine was only $25,000 for a company which has a capitalization of about $26 billion. This makes a joke of price discovery and the policing of these markets.

This just shows the transparency that some farmers loudly clamored for years ago is just not possible the way the grain market works today.

Kyle Korneychuk
Pelly, Sask.

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Lorne Jackson


  • Bruce

    Re: Elusive Transparency When prairie grain farmers are loosing $1.50 a bushel without the single desk CWB for wheat, this is huge!

    • Harold

      The author made many summary statements, and because of my knowledge of the background behind each of the summary sentences, i was enabled to hear the message that the writer was trying to send. In other words, the author has said vastly more than what was written. Having said this, your summary sentence pertaining to the written content of the letter, makes absolutely no sense to me at all. Moreover, I like to read any contract BEFORE I sign it; regardless of the verbal promises and regardless of dollar value promises. By whose fault is there a lack of transparency; the Government? The author was speaking to an audience of Farmers. We have already heard that the Farmers have been overcharged 100 million dollars. Was this theft or what was this?: Show me the contract or is it being held in secrecy and unknown so that farmers may not act upon money stolen from their pockets. Obviously theft was included in the contract because they didn’t exactly know what to do with their ill gotten gains; It was left for debate to legitimize theft. (we teach our children better than this) Show me who the Farmers are feeding their money and losses to, or is this also vastly unknown. This is all part of a contract. Transparency doesn’t matter?

  • ed

    The farmers could use it to rebuild the CWB for wheat, barley, canola, beans, corn, etc. and increase farmers net profits by 8-10 Billion dollars $$ per year. That would probably make too much sense! Or they could just debate it to nauseum while the bigger injustices continue unabated every minute of every day, forever. Having fun yet? Wait till they lift the rail cap. It just keeps getting better and better, and better. Now that farmers have what they want, we shouldn’t be hearing from them for awhile. Next group with an issue to solve, please step forward.