And here are more thoughts from producers and one consultant about plans and comments made regarding changes to the Canadian Wheat Board.
Gerald in Alberta writes:
“In your June 21 Blog regarding CWB and “the tribe has spoken” you stated: “There should be a whole team of people working for the board with expertise in marketing, price pooling, grain quality, processing, production and weather”. Lee, who will pay for this whole team of people? Farmers complain now about cost of board when the cost of the CWB is spread across all wheat and barley marketed. And what about marketing programs like branding Canadian wheat, which benefits all wheat producers and is now entirely paid for by the CWB. Do you feel branding of wheat should 1. end 2. continue and be paid by checkoff (by CWB or another organization) from all wheat sold 3. continue and be paid only on wheat marketed through CWB, or 4. be paid by government or some other organization since benefits all farmers and all Canadians?”
Brian in Alberta writes:
“Your article “the tribe has spoken” hits the nail square on the head. It is time for the directors of the CWB to remember they were elected to manage the business affairs of the CWB and not let their personal agenda’s interfere with their job.
Unfortunately, the single desk supporters have always concentrated their efforts on preserving the single desk whether it was offering value to farmers or not. What they don’t understand is by delivering economic value to producers will ensure the preservation of the CWB. However, the economic studies they have done are so flawed that they have been mislead by their own data.
What we need is leadership and courage from these directors to move out and build a business plan that will bring economic value to those who choose to use them as their marketing agent. Unfortunately, all they can do is spout “doom and gloom” about what will happen when they are not there to protect us from the marketplace. Someone should tell them, that I as a producer, did not ask them to protect me from this environment. I do not feel threatened by the prospects of an open market, or the “big, bad, grain companies”.
The CWB is there to market grain, not advocate on my behalf or by lackers with my money without my consent or artificially promote the port of Churchill whether it gives financial benefit to all farmers in the designated are or not. The rhetoric we seem to be hearing is about jobs in Winnipeg and the threat to the port of Churchill. This is a Western Canadian issue, not confined to Manitoba. Every part of the value chain in the grain industry will survive if it offers economic value in a competitive and open market place. So if the Port of Churchill or the people working in Winnipeg contribute to this new economic model, these jobs will survive.
What everyone should be concentrating on is the job creation that will happen in a open market and an the positive atmosphere created that will attract investment. We will be moving to a true transparent and competitive market place where producers can finally manage their cash flow to meet their individual farm’s needs. This was not allowed to happen under the present system. What the single desk supporters don’t understand is that sometimes it is not about getting the highest price for their grain but about being able to deliver grain to meet their financial commitments. It is time for this Board (CWB) to show leadership and build a new plan to conduct business on a new commercial basis.
Thanks for your article Lee, it was refreshing.”
Jim in Alberta writes:
Lee…as one of the Lethbridge Correctional Center (13 farmers) alumni I couldn’t help but smile at your article “the tribe has spoken”. I am now a senior farmer that is just as determined as ever to see intrusive government over-regulation ended. It remains a mystery to me why the socialists insist on having a vote on freedom.
Freedom to enjoy the fruit of ones labor is a principle that is as old as the civilized world. Check out this reference in the bible—Ecclesiastes 3;12 + 13, 5;18 + 19. Keep up the good work.
(Editor’s Note: In case your Bible was upstairs, I looked it up: E. 3:12: “I know that there is nothing better for people than to be happy and to do good while they live. 13: That each of them may eat and drink, and find satisfaction in all their toil—this is the gift of God. And E. 5: 18: This is what I have observed to be good: that it is appropriate for a person to eat, to drink and to find satisfaction in their toilsome labor under the sun during the few days of life God has given them—for this is their lot. 19: Moreover, when God gives someone wealth and possessions, and the ability to enjoy them, to accept their lot and be happy in their toil—this is a gift of God.”
Bob in Alberta writes:
“I read with interest your blog on Grainews about the Canadian Wheat Board. You did present the two sides from individuals who are in a position to either loose or gain from the changes. I am a nearly retired small farmer from the Calgary area. I have a history to draw from and the CWB is in my opinion not a vehicle that made me money, quite the opposite in fact. Let me give you a couple of facts of what happened to me over my career.
One wet year we had a frost toward the end of the season. When starting to market this crop it was graded ergoty. Just after harvest no one would buy ergoty grain but the CWB and they would but as ergoty offering $1.40 per bushel. My sharp pencil showed a loss if sold this way through the board. I started my homework and found futures better and decided to find a good basis from an elevator company and sell on the open market. I set a price for a reasonable profit, signed the basis contract and put the grain on the open market. My offer was picked up with the condition I would deliver this grain in later summer of the next year. I now had a profit set up but needed to fix my cash flow. My accountant said to apply for an advance from the CWB. I looked over the contract as did my accountant and found I qualified even though I would be selling all my feed grains outside the board.
It took more than one letter to get this advance and only on part of my crop. As I sold feed barley to the local feeder I sent money to the Board to settle part of my advance. One problem I overlooked was the date of the advance final payment. I needed the money from my ergoty grain for final payment to be made to the Board four weeks before that delivery.
My delivery date on the wheat was four weeks after the end of the CWB year end. When realizing this slip up and talking to the Wheat Board by phone, I offered to pay interest on the advance for the four weeks extra I would need the money and until the wheat was delivered.
I was threatened with being charged for interest on all the payment regardless of what had been paid off and all for a complete year and was told they expected the wheat to be sold through the CWB and the money in their hands at their set date. (Such friendly bureaucrats who serve the farmer).
Nothing in the contract that the I saw said marketing must be through the CWB. I took this story and the CWB threatening letter to the local elevator company who came to my rescue and let me deliver on the contract one month early, paying me for the grain and allowing me the cash flow to pay off the CWB advance at their date.
I now trust the large elevator line companies a hell of a lot more than the CWB. This line company saved me credit line charges among other things. You know, these are the big bad elevator companies NDPers can`t trust.
The CWB is bureaucracy and treat farmers the way that The Canada revenue agency does. They are not only sometimes threatening but with rules that do not help the farmer. These rules rather perpetuates the CWB bureaucracy.
My father went form a grain farmer to a mixed farm. This allowed him to make a small profit from two vertical steps in his operation. He grew feed grain for a small profit and this feed grain then went to his own small feedlot where he made a profit from feeding cattle. Vertical integration is how I rationalized his management model.
When I came back to the farm after my father was too ill to continue, I knew that my allergies (or hay fever) Ì had as a kid would act up if I had cattle and worked with their feed. I decided to try marketing my own wheat through a small mill, selling the milled products into a niche market that was local (farmer`s markets).
I found to set up my own mill I would need to sell the wheat to the CWB and buy it back from the CWB even thought the wheat never left the farm. Also CWB purchase price was much lower that CWB selling price. The difference was a transport charge as well as a pooling charge. This worked completely against my model and the profits I was trying to generate.
The CWB did not help me the farmer it so often claims it serves. This model of on-farm milling has been done successfully on a farm west of Bozeman, Montana. I was there in 2010 and it has expanded to mill the wheat from the neighbouring farms as well. This Montana mill also now has a bakery and coffee shop and lots of customers. My wife and I had to stand in line for a table to have a coffee and munchie. This is in a State that has a lower density of population than Alberta. Why is this so? They are in the USA and we are in Canada. Pity. Without that hopeful mill operation I have been forced to keep an off farm job for my whole career.
The CWB has to go from its present form to a form that supports the farmer. Pooling is not the answer unless you are socialist farmer who feels he will gain from his neighbours through pooling. You know, the kind of people who infer “I want and you pay for it“.
The CWB only focuses on exports of wheat and malt barley. I made more money from peas as a crop and they were exported through the open market. This also means all people who work for the CWB in a management position are steeped in bureaucracy and must be fired for the board to thrive.”
And marketing consultant Ron Frost of Calgary writes:
“The topic of the CWB monopoly is very polarized with some believing the CWB adds value with a monopoly marketing structure, while others like myself grew varieties of wheat and barley in the 1980’s to avoid the bureaucratic anchor they represent where pooled, “average” prices just didn’t seem to be an acceptably high target. Years later I am not involved in production first hand, but I still strive to assist producers achieve above average prices whether it be canola or the PRO’s through the Board that are truly a poor alternative to a true open market mechanism that many desire.
In Mr. Oberg’s comments he seems to be of the opinion that there is no way for the CWB to survive in a dual marketing structure, yet the government of Canada in the 1935 CWB Act created a structure that was voluntary, not mandatory. In 1943 without a farmer vote (point) that structure was changed to mandatory, it was legislated by the federal government of Canada. It literally took the dire situation of WWII to force the Canadian government to remove the farmers’ rights and freedoms to market their grain to whomever they chose in the 1940’s. The return of those rights and freedoms through legislation is long overdue.
He stated in his speech at the Western Canadian Farm progress show, “Since the CWB is the marketing structure for farmers – not a grain company – it has no assets. Under the CWB act it is not allowed to own real assets. It has no grain handling infrastructure, no capital base for borrowing money or financing its operations. It exists by virtue of legislation and by the existence of government financial guarantees.” Let’s stop right there, so what in the world is he as a director for the CWB doing going out and buying ships? Further before he gets too high and mighty it’s all up to farmers what about the hundreds of millions of dollars the Canadian taxpayer have footed over past years to cover initial price deficits. Doesn’t that kind of make it every Canadian taxpayers business and as the representative of every Canadian taxpayer the government of Canada has the right to change the laws that govern the CWB as it has done on many occasions over the past decades.
The CWB existed from the mid-1930s to 1943 in a voluntary structure, so his fear mongering that it cannot exist in any format other than a monopoly has zero basis. In today’s business environment the telecommunications industry is a prime example where a few companies own the infrastructure, while many “agents” provide services through that network alongside the infrastructure owners. They not only survive, many of these companies are thriving without the burden of bricks and mortar, so why is it that he can’t see a useful and valuable role for the CWB in a similar situation. You are correct the debate of the CWB role after single desk will also be a topic of heated debates as everyone offers diverse views.
In my opinion what must change is that the CWB will require individuals at the helm that are entrepreneurial thinkers that seek out opportunities and solutions as they carve out their niche within the new environment and given Mr. Oberg’s comments he may not be the best person for that position. Just my 2 cents worth.”
