In the dying days of Canadian Wheat Board elections last week, the conservative business think-tank C.D. Howe Institute entered the fray by alleging the board typically receives a lower price than American farmers get.
Immediately, the CWB and some prominent supporters denounced the report as flawed and politically biased.
“Farmers are not well served by another report based on false assumptions and oversimplified numbers,” CWB president Ian White said in a statement issued before the report was released Nov. 18. The C.D. Howe researchers had sent a copy to the board in advance for comments.
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Sylvain Charlebois, associate dean at the Faculty of Business Administration at the University of Regina and co-author of the report, shot back that the analysis is valid and the board is being defensive.
“They are nervous and rightly so because there have been a lot of reports in recent years questioning its effectiveness,” he said Nov. 24. “They have a defensive knee-jerk reaction when anyone says they are not doing a good job. This report certainly shows it is not doing a good job. It is not a good trader.”
Agriculture minister Gerry Ritz agreed. It is another piece of a growing pile of evidence that the CWB monopoly does not serve farmers well, he said Nov. 21.
At issue is a comparison by Charlebois and co-author Richard Pebble of CWB payments to farmers under the Daily Price Contract program for the three years to mid-2008 when the program was changed.
They compared those prices for deliveries from southern Saskatchewan and Alberta to average prices from locations in northern and central Montana.
“During the period, Canadian farmers were paid an average $32.81 per tonne less than U.S. farmers,” they concluded.
“We estimate that hedging losses were another $75 per tonne …. An average farmer who delivered approximately 700 tonnes annually to the CWB pool accounts would face an opportunity cost relative to selling at U.S. prices of at least $18,000 per year.”
The report called for reform at the CWB including more transparent reporting of prices received and better reporting to farmers.
“It’s true that every methodology has its limitations so when the CWB says there are flaws, it’s true as there would be in any study,” said Charlebois.
“But the result is not wrong and for those who say there was a political bias, I say the report was written by two supporters of the board. We are pointing out ways to make it better.”
He would not say that he supported the board’s single desk. Charlebois has been a critic of marketing monopolies.
The CWB and its supporters pounced.
White said it was a fictitious comparison because all Canadian grain could not have been sold to the elevators where that price was posted, it did not represent what American farmers actually received and other analysis suggests the board earned $560 million more for prairie farmers in 2007-08 than American farmers received.
Liberal agriculture critic Wayne Easter dismissed the result without even reading the report, saying, “this is what you would expect from a crowd with a conservative bias that set out to find evidence to support it.”
Southern Saskatchewan CWB monopoly supporter Paul Beingessner, a CWB candidate, saw a connection between the report’s conclusion and the fact that Charlebois receives research money from the grain company Viterra.
“Viterra, of course, is the grain company that declared it would do better if the CWB were to lose the single desk,” Beingessner wrote in a column.
Charlebois said that is irrelevant. His research work at the university is subject to review by an ethics committee of his peers.
