A plan to benchmark the sales performance of the Canadian Wheat Board has received a failing mark from one of the board’s harshest critics.
The grain marketing agency has hired a consultant to devise a way of determining whether farmers fare better under single desk selling or the open market.
Last week the Western Canadian Wheat Growers Association rejected the whole idea. Association president Ted Menzies called the benchmarking proposal “a costly, ill-conceived exercise in futility.
“We’ve traveled this road before and it proves absolutely nothing,” he said in a News release
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The association, which has long campaigned for an end to the board’s export monopoly, called the proposal a public relations tool that has been set up to try to convince farmers that the board is doing a wonderful job.
But Richard Gray, the University of Sask-atchewan economist hired by the board, said it’s the wheat growers who are biased.
“It seems to me the wheat growers have already concluded you should get rid of the single desk,” he said in an interview.
“What we are trying to do is provide some information, like comparing Canadian and U.S. prices, so that producers can make up their minds.”
The benchmarking plan, which will be submitted to the board this spring, will compare farmgate prices at three comparable locations near the Canada/United States border, as well as port selling prices at Vancouver and Seattle.
The board says the information will be made public so farmers can judge whether the board is getting the best price for farmers. The numbers will also be used internally by the board to assess the performance of its sales staff.
Gray said it’s ironic the wheat growers association is so quick to dismiss the benchmarking proposal, since it has been asking for years for the board to open itself up to more scrutiny by outsiders
If the association thinks there is a problem with the method proposed for comparing Canadian and U.S. farmgate and port prices, he’d like to hear from them.
“If it’s not an objective measure in their opinion, I’d like to hear how they would do it better,” he said. “I’d like to hear their suggestions for improvement rather than just saying the whole thing’s biased.”
Assumption made
One concern raised by the wheat growers involves one of the working papers written by a member of the team of economists providing advice to Gray. That paper, designed to establish a framework for measuring the performance of the two systems, states as one of its assumptions that CWB management makes decisions based on the goal of maximizing returns to farmers. The wheat growers say that indicates pro-CWB bias.
Gray said that’s not true, that an assumption is not the same as a conclusion, and that in any case that assumption does not appear in the actual benchmarking proposal.
The wheat growers say rather than doing studies, there is a simple way to judge whether farmers get better returns from single desk selling or the open market.
End the board’s export monopoly and make it compete against other grain exporters.
“Let them become a voluntary organization and go head to head with the private trade,” said Menzies. “If the CWB is as good as it says it is, then it will prove its worth against the only benchmark that counts, and that is commercial competition.”
Gray said that wouldn’t provide an answer to the question of whether the open market or single desk is better for farmers, because once the board becomes voluntary, it’s no longer a single desk seller.
“Once you do that, you’ve changed the fundamental nature of the board,” he said.
Meanwhile, a farm organization that supports single desk selling said it has no problems with the benchmarking plan and thinks the board will fare well in any comparison with the open market.
“I’m convinced there are significant benefits from the board,” said National Farmers Union executive secretary Darrin Qualman.
