Grain farmers’ belts have been tightened pretty well to the last notch, says the Western Canadian Wheat Growers Association.
Now, it says, the Canadian Wheat Board should help farmers by following suit.
“The time has come for the CWB to acknowledge the tough times in the grain industry and cut its own costs,” said association president Ted Menzies.
Unlike a private company or a government agency, he said, the board doesn’t have to watch its bottom line and answer to shareholders or taxpayers.
Read Also
Stock dogs show off herding skills at Ag in Motion
Stock dogs draw a crowd at Ag in Motion. Border collies and other herding breeds are well known for the work they do on the farm.
“It takes its operating expenses off the top of sales and the rest goes to farmers through the pool accounts,” he said in a News release
news.
“There isn’t any incentive to cut back in tough times.”
But the board said it is well aware of the financial squeeze being felt by many farmers and is constantly working to keep costs to a minimum.
“It’s the driving force of much of what we do,” said board chair Ken Ritter.
“The issue of costs is part of every program, every initiative, every debate we have at the board table.”
The board’s incentive is that directors are directly accountable to farmers, he said, and they take that responsibility seriously.
Ritter said the board of directors has told the senior management team to place special emphasis on cost control due to the effect of this year’s drought.
“It looks like volumes will be lower and we want our management to look at every possible circumstance where they can control costs and ensure farmers are receiving the most value for their grain.”
The board’s administrative costs, which are relatively unaffected by volumes, totalled $63.7 million in the 1999-2000 crop year, up from $56.6 million the previous year.
Board officials said it’s too early to project administrative costs for the year that ended July 31, 2001.
“At this point I can’t hazard a guess as to whether it will be higher or lower,” said board spokesperson Jim Pietryk.
He said unexpected expenses associated with such things as the trade challenge in the United States and the Y2K computer issue could show up in administrative expenses for 2000-01.
The cost of ongoing programs such as market development, cash advance administration and financial management are also unrelated to grain volumes.
In its News release
news, the wheat growers association took the board to task for spending too much on public relations while sales volumes have been declining.
“If the CWB is unable or unwilling to sell our wheat and unwilling to tighten its own belt, then farmers need other options,” Menzies said.
The association, which is a regular and vociferous critic of CWB operations, said the board should stop spending money on anything that is not directly related to marketing grain.
Board officials said the biggest part of its public relations and communications budget involves direct communications with producers on farm-related issues such as market outlooks, new pricing options and transportation policy.
Ritter said that like everything else, the board’s communications activities are subjected to a cost-benefit analysis.
