The Fall Out When the CWB Loses the Single Desk

By Shaun Haney

With the Conservatives winning a majority it took very little time for the speculation to begin on how long it will take the Canadian Wheat Board’s single desk responsibilities on wheat to be extinguished.  It was interesting to watch the live discussion on twitter while the election results were being posted on CBC.  While some farmers thought the single desk would be gone by breakfast a few people thought it might not even happen.   Well I am here to tell you that the single desk is going to vanish from the clutches of the CWB which will make the next four to five years very interesting.  Here are some random thoughts I have had about this topic since the majority was announced.

  • According to Gerry Ritz that we aren’t even going to get to vote on it.  Although I think a vote would make some sense for farmers to provide an official position, I understand why the Conservatives are taking their solid support in rural ridings as the same thing.   Did some single desk supporters vote Conservative in the election?  Probably some, but enough to swing the single desk vote the other way, I have no idea.
  • One of the things that tweaks my curiosity is what we will see happen with the key domestic and international employees at the CWB.  I would expect that Viterra, Richardson’s and Cargill will be taking a very keen interest in which CWB employee will be advantageous recruits once the CWB loses the single desk or even before.
  • What are some of our grower associations like the Grain Growers of Canada and Friends of the CWB going to do when the single desk is removed.  Considerable time and energy from these groups has been committed to either preserving or dismantling the single desk.  It will be interesting to watch what becomes the next key topics for these groups as change happens.  I would think the rail service within the country will be the next key target.
  • If the CWB does not have a single desk will it still view the lakers as a key strategic investment?
  • Is there anything that could happen to stop this move by the federal conservatives.  Will legal action by the CWB supporters put any stop to this?

All in all I think that we will have no more single desk within three years which will dramatically change the landscape in Western Canada.  The challenge will be for many farmers to try and steer their way through this change.  I think that many farmers are licking their lips but at the same time it will be more different than anticipated.  The key is that this is not the death of the CWB but a dramatic change.  Just like farmers have to be up for new challenges, the CWB and its leadership must do the same.

 

Shaun Haney

Shaun grew up on a family seed farm in Southern Alberta. Haney Farms produces, conditions and retails wheat, barley, canola and corn seed. Shaun Haney is the founder of RealAgriculture.com. @shaunhaney

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17 Comments

Andy

I know of people whose vote was solely based on position on the CWB (Pro monopoly). It would be nice to live in a world where there is only one single issue that is that pressing on my life!

Secondly, did the farmers vote IN the wheat board in 1935? No they did not, it was an act of Parliament. Seems like a precedent to follow.

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Dave

I think the CWB’s days are now numbered but I suspect that five years from now producers will look back and wonder why anyone made such a big deal about an issue that makes so little difference. I suspect that the average price for grains will be similar but this time some will get better than average and some will get worse but overall the average prices will remain the same. I suspect the independent inland terminals will soon disappear now that they don’t have the CWB to level the playing field. It might be a really good time to buy Viterra stock sine they are now so dominant on the prairies. The CWb’s international marketing people I suspect will be really valuable recruits. Besides one of the big international players like ADM, Bunge or Cargill could do a buyout to lockup western Canadian grains.

Long term it will be interesting what will happen to Conservative fortunes in the west if they follow through and get rid of the CWB, the gun registry and the polarizing debates that went with them that kept their base mobilized.

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sasky

Can anyone speculate on whether the CWB can even survive (say three years out) without a forced monopoly? Without owning collection, storage, and port facilties. Without deep pockets to pay cash for grain. What do they have to offer then? What might their new business model be if they survive?

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Dennis Laughton

One fact that I have not seen is –what proportion of the wheat sales comes through the private grain trade?

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Richard Phillips

Just to set the record straight, the grain Growers have not spent considerable time on the CWB file over the last couple years.

Our key files have been pushing for more public research, the rail service review, fighting against the anti-biotechnology nuts and increasing market access through trade negotiations.

A quick peek at our website and our news releases would show what a low profile CWB has had.

That said, our policy does support market choice and we’ve been in contact with the Minister and his senior staff with constructive suggestions on what a transition might look like.

What is unfortunate is that this situation was entirely predictable and rather than have made progressive changes, especially in barley, in anticipation of a majority Conservative Gov’t, the CWB and it’s Friends have fought an all or nothing battle. Even though their own surveys showed every year barley farmers wanted choice, they put their corporate interests ahead of the farmers and refused to budge.

Now, with the wheat and barley monopolies about to be ended, they have zero bargaining leverage.

At the end of the day, it’s those Friends and the left wing narrow majority on the CWB Board who as a result of thwarting progressive change are now responsible for the Government implementing sweeping change.

Rather than blame the Conservatives, they need only look in the mirror to see who is responsible.

In my opinion.

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Vicki Dutton

Tally ho, I agree Richard. The stalwart stewards of the CWB refused to even address the voters list to insure it was a fair reprentation of the farmers they claimed to represent, and so kind of like the Sask Wheat Pool that disallowed any directors who did not have 100% loyalty to be a director, the little light that may have shone was kept outside the hallowed inner chambers reserved for only the dogmatic supporters. Sustained years of unaccountable management may also impede the transformation. However, 400 or 500 employees may have to become creative and figure out how to manage the portfolio, and I believe where there is a will there is a way. Farmers are used to pooling wheat and my actually benefit from a profit minded process… and indeed it has been suggested that some type of transformation support process should be a Federal obligation (the price of the war efforst prolonged) be included in the transition.

As a producer it is in our best interests to insure the process does not create any undue chaos as always at the end of the day we pay the full costs of transformation ie: Crow Rate.

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wayne

In regards to Richard, I take it you are in favor of putting genes of unlike plants into to others so we produce super plants that need another poison to control, sounds like a plan to me. It will help keep the Monsanto’s in the chips!!!

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Amron

Controlled by western Canadian farmers, the Canadian Wheat Board is the world’s largest marketing agency for wheat and barley. The Canadian Wheat Board is placed strategically to ensure that Western Canadian farmers will benefit from the future value to be placed on food production because the CWB sells grain to over 70 countries and returns all sales revenue, less marketing costs, to farmers. The cost to farmers is 2%.
The CWB offers STRENGTH in marketing our wheat to a global population. A single farm producer acting alone to market his/her product does not possess that strength.
Why would a sane person consider the removal of producers’ only strength? If you cut off the most important parts from a service provider, that provider would not have the strength to deal effectively in a global marketplace.
The CWB acts for farm producers the same as Canpotex acts for the potash industry. It represents strength in marketing the product, a confidence in the product, an assured delivery date to a global market, and assured returns for all producers that are received at regular intervals in order to allow budgeting. It is orderly and honest marketing of wheat and barley. CWB marketing works well for producers and purchasers by ensuring STABILITY in planning and budgeting.
Why would any western Canadian independent business voluntarily give up its marketing service to American or multinational grain companies? When you cut off pieces from a company, then your company loses strength, power on the global marketplace.

Strength is produced from people working together, that is how our western provinces were built.
The flawed judgment of the Harper government will force farmers to be dependent upon the grain companies to determine our economic future. The mandate for grain companies is to make as much profit as possible for their shareholders, not a profit for farmers, that is their business.

In the real world of farming, there are few things that farmers can control. Costs for inputs such as chemicals, pesticides, fertilizers, seed, machinery and equipment, and grain drying systems are not within our control. We cannot control the extreme weather conditions, nor which type of diseases and pests will attack this year’s crops. We need the controlled marketing system of the CWB so that we can plan purchases and budgets for efficiency and stability. We know that the CWB sells our wheat for the best price possible, and that all farmers receive the same fair price per tonne of grain. That knowledge frees up farmers so that we can focus on producing the best grains possible. Without the CWB, we would spend hours each year on the internet trying to determine when to sell what products.

And we know that grain companies know the periods when farmers need cash to pay bills, and those are the times when prices for commodities are the lowest. They play the game most effectively to make more profits for their shareholders. That is their job.

In the near future, four strategic resources will dominate world power struggles and global dominance:
– Food
– Energy
– Clean Water
– Clean Air

Western Canadian provinces possess all four resources. The western provinces have the opportunity to benefit from the resources power only if they carefully manage the resources as they enter the marketplace.

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Amron

Cargill (US Corporation) just paid Agrium $677M for AWB’s commodity management.

Does the Harper government plan to sell the assets, goodwill and credible reputation of the CWB to a multinational corporation in order to pay off the huge debt that this government has created?

After all, by the time of the next election, no one except western Canadian farmers (2% of population) would remember that the government screwed the farmers.

It appears that the federal government plans to sell the farmer controlled CWB in order to finance debt reduction and cover its butt after dipping into Federal Reserves to print new money so that it would appear that Canada is financially sound.

OR, now that Harper has a majority coalition government composed of Progressive Conservatives, Alliance and Reformers, does he feel compelled to appease each group with political idealistic actions?

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kevin serfas

Amron. How do explain PRO today at $8.98 net Lethbridge for #1HRSW 14.5 protien vs $11.39 net Shelby, Montana HRSW 14% protien. That doesn’t seem like anyone is trying to give me the most for my grain. That is why my business is willing to give up the monopoly.

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kevin serfas

And I also love how the people that are against progress in technology and genetics in agriculture are able to throw in a Monsanto bash during a CWB debate. Shows real intelligence.

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Andy

Wayne -The evidence is that wheat is a hybrid of up to 3 ancient grains from the middle east. And corn was developed by the central american cultures over thousands of years. They are as much a modification as any RR crop. It is just an exercise in time.

” that all farmers receive the same fair price per tonne of grain”

Ah, the Canadian way -I don’t care how much poor my price is as long as my neighbor doesn’t get a better price…ever!

I hope you don’t grow any non-board grains, Amron. Because the plane tickets to india, china, europe and south america must really cut into your ‘budgeting’!

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Matthew Stanford

Nicely said Andy and Kevin. If you want to talk about barriers to entering farming for young people, the CWB would be a huge one. Its pretty hard to make your payments when you have the CWB doing your budgeting for you. If I had to guess, Amron and Wayne were caught up in the “orange wave” and elected a teenager as their MP. Sour grapes.

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charlie

Amron; The CWB is farmer controlled? Thats why it needs a FEDERAL ACT TO DEFEND IT SELF IS IT !!!!!!
Lets get rid of the CWB ACT and the goverment interverence and then we can be truly farmer owned and controlled.

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mike

I agree with Amron. You may be able to market your grain for a better price then the CWB now, but once they are gone Cargill will tell you how much they are going to pay for it -and it will be far from a fair price. Perhaps, they will give you a fair price for your land when Western farmers start working directly for them -at least it will be a steady income.

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Shaun Haney

Cargill or any other grain company does not set the global wheat price. The issue here is about the option be able to sell to who is the best fit at that time on your farm.

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