Marit is president of the Saskatchewan Association of Rural Municipalities.
In light of the recent debate regarding marketing choice, the Saskatchewan Association of Rural Municipalities wanted to promote a resolution that was carried by the majority of its members at its March 2006 annual convention stating that “SARM lobby the federal government to continue its financial support of the government guarantees and single desk selling of the Canadian Wheat Board.”
SARM feels it is important to express why its members value the services the CWB provides in its current state.
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?
Western Canadian farmers sell 18 to 24 million tonnes of western Canadian wheat, durum and barley through the CWB each year to more than 60 countries worldwide.
Western Canadian grain farmers are competing in an international marketplace with farmers who may be receiving subsidies for the grain they produce and who pay less to transport their products because they are closer to their markets. This reality can put us at a competitive disadvantage on the world market.
The CWB provides farmers with the vehicles to establish their own competitive advantages through the single desk system, product branding and government guarantees.
The single desk provides a great economic benefit to farmers because it prevents competition among buyers, meaning they cannot bid down the price producers receive for their grain. As a result, the annual value of the single desk to farmers has been independently estimated to be between $355 and $405 million. Given the financial crisis facing farmers today, they cannot afford to lose this economic benefit.
A second benefit to single desk is that it operates by way of pool accounts, which return revenues to producers, less marketing costs. This system ensures that all farmers receive their share of the single desk premium, that farmers are not disadvantaged due to the timing of a sale, and it spreads the total cost of marketing, delivery and distribution over the entire volume sold, meaning it is not attributed to individual farmers.
We also believe that the customer service the CWB offers our buyers has played a role in creating a worldwide recognition that Canadian grain is high quality, safe and consistent. The marketing contacts the CWB has established and the brand that is associated with western Canadian wheat and barley are crucial to maintaining access to our markets and will play a critical role in assisting us to establish relationships with new markets.
We also want to stress the significant benefits farmers receive from initial payments and guarantees provided by the government of Canada. Without these in place, farmers would be without protection in the event of a market collapse.
As well, the fact that the CWB can borrow funds from government at a competitive rate means the CWB can provide more money to producers.
Other benefits include the CWB’s co-ordination of grain transportation on our railways and the administration of producer cars. In 2004-05, a total of 8,061 loads of grain were shipped via producer cars from 466 different loading sites in Western Canada, saving producers approximately $10 per tonne on the cost of shipping grain to market. Of these, 7,965 of these loads carried CWB grains.
On Sept. 26, SARM sent a letter to federal agriculture minister Chuck Strahl reiterating its resolution and outlining the benefits of the CWB. It has also asked that the membership voice their opinions to the minister by way of personal correspondence to ensure that the voice of western Canadian grain producers is heard.
The intentions of the federal government to move toward marketing choice have made this a contentious issue that has intensified over the past few months. SARM hopes that minister Strahl seriously considers how much benefit the current CWB provides to farmers before making a decision that will impact farm income for a long time to come.
