THE Canadian Wheat Board’s cost-cutting measures might seem small on the surface but the plan should give the board much-needed flexibility to respond to changing market conditions.
The CWB is cutting about 20 percent of its workforce hoping to realize net savings of about $5.5 million each year in administrative expenses. That equals $76 per year for each CWB permit book holder or about three-quarters of a cent per bushel of board grain.
The changes take on added significance in light of the board’s ability to tweak operations to meet the challenges of changing economics.
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Prices had been softening for most of the previous month, but heading into the Labour Day long weekend, the price drops were startling.
In the past, although the board cut travel and froze some salaries during lean times, it had only 15 percent of its budget to cut from. About 85 percent was tied to salaries and benefits, difficult items to trim.
After the announced cuts are made, more of the board’s work will be done on contract instead of by CWB employees. That should place the board in a better position to react during tight economic times by giving it the flexibility to cancel out-sourced projects.
Until now, it made little sense for the board to cancel such work because it was still on the hook for the salaries whether the project went ahead or not.
The board said some of the positions it is cutting will be replaced by contracted services in areas including computers, building maintenance, catering, security and translation.
While job losses are regrettable, the move represents the latest efforts by the board to be more responsive to farmers.
Since farmer-elected directors were instituted into the board’s operating structure in 1999, we have a seen a growing emphasis on accountability.
That led to increased costs as the elected directors held public meetings and issued more public communiqués as part of a need to keep farmers better apprised of the board’s activities.
Critics of the board say the organization should get out of public relations entirely, but such a move would be inconsistent with requests that the board be more responsive to farmers. Communication is key to accountability.
But there is also need for caution. It is good policy to review operations and explore ways to limit expenses, but the federal auditor-general reviewed CWB operations in 2002 and found it to be efficiently run.
Efforts to improve on that performance, while admirable and appropriate, must ensure vital services to farmers are protected.
The job cuts were announced after a year-long review of operations.
That review must continue, not only to highlight future efficiency gains, but to monitor, evaluate and ensure that the latest cuts bring about the desired results rather than compromise the board’s ability to do its job.
