EDMONTON – It is a miracle farmers are in business at all, judging by a report that says single-desk selling costs farmers $20 a tonne on their sales, says a federal task force panelist looking into the future of grain marketing.
“I wonder how farmers are still in business after looking at the report,” Avery Sahl said during a question period after a presentation of an Alberta government commissioned report.
The Saskatchewan panel member pointed to new pick-up trucks on main streets of small towns as evidence many farmers are doing fine.
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But Colin Carter, one of the report’s authors, said the report tries to point out what profits farmers have never seen because of the Canadian Wheat Board’s export monopoly on western grown wheat and barley.
“What sort of profits have been forgone? Most people agree there is a problem, including the federal minister. Why are you serving on the panel if you don’t feel there is a problem?” asked Carter, a University of California economist who co-wrote the report with Manitoba economist Al Loyns.
The authors say a single-desk selling monopoly costs prairie farmers at least $20 a tonne for wheat and barley. In addition the government backing for wheat board loans and food aid sales costs taxpayers an additional $5.50 a tonne for wheat and $9 a tonne for barley.
“It is no secret the Canadian grain marketing system is highly inefficient,” said Carter.
He points to poor price signals to farmers on what grain to grow, the Canadian Wheat Board’s encouragement to grow high quality grain when the world wants low and medium quality grain, and giving away number one grain for number three as examples of costs to the farmer.
“If we had a dual market between the privates and the co-ops, the firms would compete with each other and prices for farmers would be higher,” he said.
Carter pointed to the Australian domestic market, rice marketing in California and cotton sales as examples of dual marketing success stories.
Alberta agriculture minister Walter Paszkowski said the report is proof dual marketing is essential.
“The report clearly indicates there are handicaps with single-desk marketing,” he said during a news conference.
“We’re not asking to abolish the Canadian Wheat Board. What we’re asking is changes be made that would make the wheat board more responsible to the needs of producers,” he said.
“There’s obviously money being left at the table,” he said.
Better without board
Larry Maguire, president of the Western Canadian Wheat Growers, a commodity organization, said the report provides evidence farmers could get more money without the wheat board.
But Bob Roehle, manager of the information department at the wheat board, said he’s disappointed the authors never changed their report after the board pointed out “glaring errors” when a preliminary report was released three weeks ago.
“They are being single-minded. It’s surprising they continued to make those statements when we pointed out that they were patently incorrect,” said Roehle.
While a country may request a low grade, they pay for any higher grain included in the shipment.
He said the board will look at the report carefully, but he’s disappointed the authors didn’t come to the board for clarification.
“We didn’t see a lot new in the study. It’s a big collection of anecdotal evidence,” said Roehle.
