Yesterday at the Canada Grains Council’s annual meeting here in Winnipeg, a topic dear to my heart came up a few times, mostly tangentially.
Basically, it was the question of how much more efficient will the grain industry be with just one set of signals running through the system of grain elevators, railways and ports than it has been with two systems? It wasn’t directly addressed in a detailed way, but it kept popping up. If we’re lucky, it’ll be a lot more efficient.
It’s always going to be hard to find out exactly how much more efficient the system will be without the Canadian Wheat Board’s complicating system of command-and-control and other factors banging into the normal commercial signals. Any answer will come from indirect measures. The grain industry isn’t in a laboratory and has hundreds of complicating factors affecting it. But few engineers or designers would deny that forcing any system of hardware to operate two different operating systems creates a significant efficiency cost. Go ask my wife, whose Mac computer has to operate a virtual Windows O/S as well as the Mac system in order to handle files, documents and programs for her business. Or ask me, who gets asked by her why the heck her computer keeps getting mixed up. It’s not easy running two systems at once. Even if the real problem is human error. (Usually mine.) These are all human systems. And humans don’t cope well with complexity. So making stuff simple is generally better.
Read Also
Agriculture needs to prepare for government spending cuts
As government makes necessary cuts to spending, what can be reduced or restructured in the budgets for agriculture?
A railway representative said the elimination of the CWB’s separate system of moving grain through the system was like adding lots of new capacity to the existing system. A grain company representative said the whole system should work much better. A farmer representative said farmers will stop growing crops to fit the complications created by the different marketing systems governing CWB and non-CWB crops.
To me the question of the inefficiencies created by the CWB system was always the central question. There were two sides to the question: 1) how much inefficiency does having a second set of signals create in a system mostly based on another system?; 2) how much premium did the CWB get on grains that it marketed by its unique system?
That all adds up to: Is/Was the CWB system worth it? Did the premium exceed the efficiency costs to the system?
That was never resolved while the old board existed, since people preferred to argue ideological claptrap rather than cold-hearted commercial analysis, and can’t really be resolved now that the old board doesn’t exist. Analysis of rail performance and elevator turns and other statistics will give us some sense of it, but – as I’ve whined before – the central question will never be truly answered.
Anyway, it was good to see that the grain industry has moved on and is sorting though the 10,000 complications created by a huge structural change like this. There’s a lot to still sort out with little time before the new crop year, so I suppose academic questions like the one I needlessly raised above really aren’t the point now.
