In a public commentary in Johnston’s Daily blog, Nov. 1, Allan Johnston reprints a claim by John De Pape stating the problem with the CWB single desk in barley is the international price is not translated into the domestic price.
To directly quote Mr. De Pape: “This means that the local price of barley to the local feedlot or feedmill stays lower than it would otherwise. Farmers end up selling barley locally for a lot less than they would otherwise.”
We heard this before in 1995 when another anti-board type made the same claim Mr. Johnston is doing now. R-CALF, the U.S. protectionist group, was listening. What they heard then was the CWB was providing subsidized grain to Canadian feedlots. They successfully got the U.S. Department of Commerce to launch a trade challenge against Canadian feedlots and the CWB on the basis of what the anti-board types like Mr. Johnston had been saying.
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The Yanks audited six representative Canadian feedlots, all CWB barley sales and private trade sales in both Canada and the US.
Fighting the challenge cost over $10 million. The Yanks found the CWB was actually getting higher prices for barley than the open market was providing and also concluded Canadian feedlots were therefore not subsidized by the CWB.
As a private trader, Mr. De Pape certainly has a right to his opinion, but the U.S. Department of Commerce investigation into barley and feedlots in Canada shows he is not on solid ground about the CWB and domestic barley prices.
I hope his opinion does not cost another $10 million.
Ken Larsen,
Benalto, Alta.
