Canada has the best grainhandling and marketing system in the world. Despite some flaws, it is still a much-envied integrated system of delivery opportunities, rail transportation, quality standards, and global marketing.
How well has this system succeeded? Part of the research for the recent grain marketing report was to find out what importing countries thought about the exporting nations.
Canada finished first out of five major exporters in the categories of intrinsic quality of the commodity, cleanliness of commodity, consistency of quality, technical support, long-term dependability of supply, efficiency of contract execution, and customer service policies.
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It placed second in forward pricing opportunities and government credit, and dead last in the price category.
If this were the Olympics, that would be an astounding seven gold medals and two silver out of 10 events.
But the biggest achievement may have been finishing last in the price category. That means the Canadian system, because of its achievements in the other categories, is able to get buyers to pay more for Canadian grain.
At the hub of this outstandingly successful grain marketing system, of course, is the Canadian Wheat Board.
The board’s exclusive powers to market wheat and barley for export mean that the right types of grain can move from the farm at the right times to meet the needs of premium customers.
Although improvements can be made, it’s fundamentally an ideal system for the benefit of farmers collectively and of national export earnings.
Yet the grain marketing panel, with little explanation, is recommending severe disruption to this system by removing the board’s export monopoly on barley and weakening the price pooling system for wheat.
Those sound like very risky changes that should be avoided unless a good majority of farmers vote for them. And if such a vote ever happens, it should only be after farmers get much more information. As the panel itself said, “Careful design and implementation of this option will be essential for it to become a viable and successful alternative to farmers.” If careful design is so essential to make change viable, that design work should be done first – before farmers are asked to approve dangerous change.
Accepting these recommendations would be like signing a promissory note pledging all your possessions, leaving a blank space for the bank to fill in terms of repayment, interest calculations, provisions for seizure, etc.
Until someone provides the essential fine print, the only logical answer is: “No deal.”
