Seller, not buyer
As usual, David Anderson has it all wrong when it comes to the Canadian Wheat Board. In his letter of July 12, he has demonstrated how clearly he misses the point of a single desk seller.
His comment that “anyone who has been to an auction knows that if you’re selling something, you want more than one person bidding on it” insinuates that the CWB is buying your grain. David, the CWB is selling your grain.
In a market with many sellers and very few buyers, the buyers can discriminate on the basis of price. The five or six major grain companies in the world will pay exactly the least that thousands of sellers will accept for their grain. Their profits are based on a simple principle: buy as cheaply as possible and sell as dearly as possible.
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The single desk operates differently. Its mandate is to return as much as it can extract from the marketplace to the producer.
As the only seller of western Canadian wheat, and of malt and export feed barley, the CWB can sell our product into premium markets such as Japan and return those profits to western Canadian farmers.
When it comes to selling, the CWB provides what individual producers cannot: market strength. It might have been a good idea for David Anderson to have paid attention when former wheat board CEO Adrian Measner was presenting the benefits of the single desk to the Standing Committee on Agriculture.
As part of this Conservative government, I guess it is easy to see how Mr. Anderson would refuse to listen to any view opposed to his own.
– Duane Filson,
Woodrow, Sask.
Misunderstanding
There is a basic misunderstanding that the Parliamentary Secretary to the Minister of Agriculture, David Anderson, appears unable to overcome.
In his recent letter “Many buyers” (WP, July 12), he describes the CWB as a buyer of prairie grain and he talks about the self-evident benefits of having more than one buyer in the marketplace. If the CWB was a buyer of wheat and barley, he would be right. But it isn’t.
The CWB is an agent. To use Anderson’s own auction analogy, the CWB isn’t the buyer: the CWB is the auctioneer. As farmers, those of us who want to keep the CWB as a single-desk seller of wheat and barley think that selling all of our grain through one auctioneer makes sense….
We think it’s a good deal. And though we’re always looking at ways of improving the business relationship we have with the auctioneer, we’re not interested in anything that will take away from the market clout that going with someone big and reputable gives us, not when the business of growing and selling grain is as tough as it is.
So while everyone agrees that farmers want more flexibility in when their grain gets priced, when it is delivered and when they get paid for it, the majority of the CWB’s farmer directors, including myself, are just not convinced that it should come at the expense of the marketing clout the CWB gives us.
That’s why, in spite of what Mr. Anderson says, it is not incumbent on us to co-operate with the federal government in the dismantlement of the CWB’s single desk on barley.
Quite the contrary: it’s incumbent on us to stand up for grain producers and the power we wield in the marketplace through our single desk agent.
– Ken Ritter,
Chair, CWB board of directors,
Kindersley, Sask.
CWB myths
The barley monopoly that never was is finally gone. Let’s put aside some other CWB myths and rhetoric.
The CWB does not have legislated monopoly powers. It has licensing authority and it uses the denial of licences to effect control of grain producers.
The CWB does not create value. It is an accounting system and it is a cost to producers.
The CWB is not and never has been legally accountable to farmers. It is only accountable to Parliament and the minister.
The federal cabinet sets the initial prices and interim increases by order-in-council for all grain purchased by the CWB. All expenses of the CWB are approved by the minister or by order-in-council.
The CWB must report monthly all grain sales and credit balance to the minister. The CWB must accept and market all grain offered to it but it is only responsible for grain that is offered to it. Farmers are not obligated to sell to the CWB.
Grain companies must accept grain delivered to them and assigned to the CWB. The grain company, as an agent of the CWB, must pay the producer the initial price, less deductions. The CWB must pay the grain company. Compliance is not optional for the CWB.
Barley is under CWB licensing by regulation. Regulations are brought in, amended or removed by order-in-council.
Farmers are forced to sell to the CWB because they were denied an export licence until they sold to the board. There is no enforcement mechanism in the CWB act. …
CWB contracts to the malt companies are price contracts only. There is no obligation on the CWB to deliver the barley. It is the responsibility of the malt company to source, directly or through a grain company, the barley they require.
Feed barley only becomes malt barley when it has been selected and accepted by a malt company for malting. Then it becomes malt barley sold into the CWB malt pool account.
If the feed price is higher, then farmers are not obligated to sell malt barley to the CWB, unless previously contracted.
In the present scenario, where the feed barley PRO is above the malt PRO, maltsters are effectively shut out of the barley market unless they pay over and above the CWB prices, or be forced to buy offshore barley.
Prairie producers are shut out of a premium market because of the CWB. Farmers’ contracts with the CWB guarantee the product, upon selection and acceptance, but not the price. CWB contracts with the maltsters guarantee the price but not the supply.
– Douglas McBain,
Cremona, Alta.
Carbon questions
Many environment experts predict all plant life on our planet will be extinguished in 15 to 30 years, which means all animal and human life will perish in the aftermath.
From media accounts, Quebec is leading Canada and the world by taking precautionary measures to ward off such a calamity and has levied a carbon tax on all combustible energy. Due to the current environment rage, all municipal, provincial and federal governments will probably follow the Quebec example.
Many questions relating to environment measures have surfaced, mainly regarding cost. Suggestions of upward to 90 cents per litre must be levied on gasoline and diesel fuel. This a starter toward corrective action to problem claims with uncertain solutions.
Should Canada be spending mega-bucks on environment issues while developing countries send huge volumes of pollutants into the atmosphere without concern?
Should the Canadian government invoke closure on all coal exports to the Far East where our coal industry feeds hundreds of manufacturing furnaces?
What effect will the carbon tax inflict on the Canadian economy?
Full price at the pump after carbon tax is levied will be somewhat more than $2 per litre.
Will we experience a 30 to 40 percent price hike while shopping for food at the supermarket?
How much cash are you prepared to pay out for the avoidance of plant life demise?
In addition to high prices at the gasoline pump and increased production costs, will there be major cuts in health care, education, native land claims, welfare, battered women’s shelters, clean needle exchange, homeless support and many other social programs?
Should Canada create new clean energy sources such as wind power on the Prairies, dam construction on the Peace, Fraser and all major Canadian rivers where fresh water and hydro can be produced and exported to replace coal export revenue?
– John Seierstad,
Cedar, B.C.
Public health care
Occasionally I run into persons who express concern that our public health-care system is unsustainable.
They are fond of arguing that there is no such thing as free health care; that public health care has to be paid for with taxes. These persons should know that there are many public services that are paid for with taxes.
The streets and bridges we drive on are free, though they were paid for with taxes. If our home catches on fire, the fire will be put out for free by the fire department, the cost of which is paid with taxes….The teachers and schools, paid for with taxes, provide our students with free basic education. Many libraries and parks, paid for with taxes, are free.
I fail to understand why anyone would consider health care, a life and death issue in many instances, to be separate from other public services.
– William Dascavich,
Edmonton, Alta.
