The Canadian Wheat Board has done nothing to prove it gets farmers a premium on barley sales through its monopoly powers, a private grain industry analyst says.
And a recent study from the University of Saskatchewan that supports the board’s claims is practically worthless because it relies upon data the board supplied in its defence.
“The wheat board puts their spin on it because they’re positioning their case,” said John DePape in an interview after he presented a dismissal of the board’s premium arguments.
“The University of Saskatchewan study (written by Richard Gray, Andrew Schmitz and Troy Schmitz) acts like these benefits are proven. I can show they’re not proven, by more than a shadow of a doubt.”
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In his presentation, DePape, argued that the wheat board probably doesn’t get a premium price for most of its offshore sales and causes inefficiencies and foul-ups in the grain handling system – costs that are pushed back to the farmgate and affects the prices farmers receive.
DePape was particularly harsh in his denial of the board’s claim that it extracts a premium price from markets like Japan, pointing out that canola sales to Japan are also made at premium prices yet there’s no canola board.
“I contend you’ll get exactly the same results (of premium pricing with or without the board),” said DePape.
“If you believe that, as I do, then the whole U of S study (which accepts the CWB premium claims) is warped…. They have not proved anything.”
DePape also provided numbers that he said showed the board’s true costs are higher than that of the open market and that its prices for barley are poor compared to the cash market for feed in Western Canada.
The wheat board denies most of DePape’s assertions, calling his examples misleading, his reasoning flawed and his arguments already considered by analysts such as those at the University of Saskatchewan.
An annoyed Bob Cuthbert, a senior CWB barley trader who heard DePape’s presentation, said the idea that an open market of multiple sellers could perform better for barley producers than the board doesn’t make sense, especially when compared to an existing open market.
“What are we doing wrong, when we malt three-and-a-half times per capita what the U.S. does, when we export five times more malt than they do, and export 10 times as much malting barley as they do,” he said after the presentation.
Fellow board official Gord Kurbis said DePape’s presentation, with its extreme skepticism about information provided by the board, added more heat than light to the debate, and didn’t help farmers reach an understanding of the true issues at stake.
He said people on both sides of the debate need to move away from belief-based positions.
But DePape found a friendly audience in the membership of the Frontier Centre, the right wing think-tank he was speaking to.
Former border runner Jim Pallister praised the presentation and said the wheat board imposes heavy operational costs on farmers and leaves them in a “shackled economy.”
While DePape, who is an open market supporter, made many criticisms of the board, he said he was not trying to say that it is impossible for the board to be making premiums. He said his point was that the present data upon which the wheat board wants to base the marketing debate is slanted.
