Beyond The Commons

Aaron Wherry covers all the goings-on in and around Parliament Hill. Follow Aaron on Twitter: @aaronwherry

Categories: Beyond The Commons, Capital Read

The Canadian Wheat Board and everything after

by Aaron Wherry on Tuesday, October 18, 2011 1:02pm - 43 Comments

The five-part act to reform the Canadian Wheat Board, as tabled today, is here.

The Harper government has prepared a series of backgrounders and an FAQ to explain it all.

Tags: agriculture, Canadian Wheat Board, grain producers, house of commons, Parliament, Wheat

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Anonymous

Well I have noooo sympathy for the farmers.

Votes have consequences….and it seems Con-types are so keen on punishing others, they’re willing to vote against their own best interests.

My only question…and it’s not covered in the FAQs I note….is why just pick on wheat farmers?

There are about 80 marketing boards in this country…when are the Feds going to dispose of the rest of them?

If marketing boards are wrong….they’re wrong for everybody.

Anonymous

Your comment somewhat oversimplifies the issue. Most marketing boards are not single-desk marketers, for example the Ontario Wheat Board, the tobacco board and just recently the OPPMB. A few are single-desk marketers (until now the CWB, supply-managed commodities, etc)..

On those that are single-desk, I entirely agree, on what logic should the CWB’s single-desk powers be removed but not also for milk/poultry/eggs? HOwever, the number of boards we are talking about with single-desk powers does not nearly approach 80. Most already do operate within an open-market system.

Anonymous

http://www.thecanadianencyclopedia.com/index.cfm?PgNm=TCE&Params=A1ARTA0000068

Anonymous

I’d respectfully submit that the author of this article is incorrect in his statement, especially given that he doesn’t cite where that statistic comes from.

Anonymous

If you run your mouse over the article, you’ll see the sources.

MM Veeman is from the Canadian Consumer Council

http://books.google.com/books/about/The_impact_of_federal_dairy_policies_and.html?id=SVC5GwAACAAJ
Anonymous

You’re citing a document from 1974, ag policy evolved a lot since then. The three examples above alone I just cited (wheat, tobacco, pork) were single-desk marketers in 1974, but today operate under an open-market system.

I don’t doubt there probably were 80 single-desk marketers in 1974, but not today.
Anonymous

Agricultural Marketing Boards in Canada: An Economic and Legal …

http://www.jstor.org/stable/825670Similar
Table 1 indicates the number of marketing boards by province and commodity type. In 1979 there were 119 active (and 5 inactive) marketing boards in. Canada . …

More than that as of 1979…so they went up, not down…but however many there are, why pick on wheat?

Get rid of all of them
Anonymous

Now you’re back to confusing single-desk marketers with those who operate in an open-market system.

http://www.omafra.gov.on.ca/english/farmproducts/factsheets/ag_market.htm

I don’t have similar stats federally, but within Ontario there are 21 marketing boards, but only 5 have single-desk powers (chicken, dairy, broiler-breeder, egg, turkey – listed at the bottom of the document).

The 5 single-desk marketers? I agree, get rid of them. The rest? They’re comparatively harmless.

(P.S. the link you posted doesn’t work)
Anonymous

@The_Original_Matlock:disqus

So in the end, you agree….get rid of them. LOL

Anonymous

You’re buying Gerry Ritz’s blustering b.s. that farmers voted for this. Farmers holding permit books account for a tiny percentage of the voters in any of the ridings affected inlcuding the one that elected the minister himself.

In actual referenda grain farmers in western Canada have repeatedly favoured single desk selling. In accepting Ritz’s fallacy, you’re blaming grain farmers for the collective decisions of their neighbours. Are you accountable for the selection of whatever yahoo got elected where you’re eligible to vote?

Anonymous

Actually, I think she’s talking about the federal election.

Anonymous

Actually I was talking about the federal election too, hence the reference to a FEDERAL agency and a FEDERAL minister.

You do know that there are plenty of other occupations in rural Canada other than grain farming, including other kinds of farming, right?

Anonymous

Fair enough, but it’s pretty well known that rural tends to run Conservative. Now I do agree that I don’t think the farmers intended to vote for this, I don’t even know that Emily thinks that.

However, the rural areas went Conservative, who had repeatedly promised to do exactly this. Whatever their reason for voting this way, her initial point is correct: votes have consequences. My initial hope with this was that the CPC doing it so soon in their term means that farmers will have the chance to see how it actually affects them before the next election.

Of course, then I read the backgrounder how they’re not just ending it. They’re putting in place a 5 year (hey.. right around an election cycle.. how lovely) transition period during which they’ll make sure that “farmers are not required to pay extraordinary costs caused by the removal of the monopoly.” aka “If this screws up, we’ll keep paying you so you don’t cotton on too quick and kick us out of office” which reminds me so much of our natural gas “privatization” out here in Alberta. That was supposed to be such a good thing and lower prices for all of us, but wound up as such a shambles that now the gov’t takes a bunch of our tax dollars every winter and hands them directly over to the (now for profit) gas company so that Albertans don’t actually see the real price of gas and what a cluster-f*ck the whole idea was.

Although, I suppose it was a win for Klein’s buddies holding shares of the gas company.
Anonymous

Ditto electricity deregulation…

Anonymous

So Sask, Man etc went Liberal or NDP?

Anonymous

Don’t be obtuse. Grain farmers aren’t the only people living in those jursidictions.

If Stratford votes Conservative in the federal election we don’t blame actors for cuts to arts funding.

Anonymous

So only the grain farmers are Libs, but they were overwhelmed by all those factory workers and IT people etc who were Con?
Anonymous

Ranchers, oil workers, store owners, implement dealers, seed and chemical sellers, fertilizer companies, haulers, railway workers, elevator employees, teachers, car and truck dealers, parts companies, small manufacturers, miners, government employees … I could go on.

Have you ever been outside a city?
Anonymous

@tobyornotoby:disqus

Grew up in farming, live in a rural area now…..so again…only the grain farmers are Libs but they were overwhelmed by all those ‘Ranchers, oil workers, store owners, implement dealers, seed and chemical sellers, fertilizer companies, haulers, railway workers, elevator employees, teachers, car and truck dealers, parts companies, small manufacturers, miners, government employees …’ that voted Con?
Anonymous

There are only about 60,000 grain farmers with a permit book or about the same number as the electors in any given constituency. It doesn’t matter which are Liberals or Conservatives or NDP voters because even if they all voted the same way, it would be dispersed across several dozen constituencies in Manitoba, Saskatchewan and Alberta.

Instead of splitting hairs with what I say, you should just admit that you are joining the Minister of Crackers in attributing the election result to this small, identifable group. Worse than Ritz you are blaming them for their own misfortune.
Anonymous

@tobyornotoby:disqus

‘blaming them for their own misfortune?’

Yup…who else would I blame?

Rurals voted Con knowing full well what it meant.
Anonymous

@tobyornotoby:disqus

I admire your perseverance..
Anonymous

Don’t mistake stubborness or deliberate obtuseness for perseverance.
Anonymous

Indeed, that would be a silly mistake to make. :-)
Anonymous

Indeed, that would be a silly mistake to make. :-)

Anonymous

Hadn’t thought of that.

More’s the pity.

Anonymous

5 years of losses covered by Parliament. The monopoly has been replace with a charity.
Anonymous

Interesting that the new Wheat Board no longer has board members elected by the farmers. Now they’re all just appointed by the Minister.

Hey all you Conservative cheer-leaders out there, is this what you mean by increasing freedom?

Anonymous

I am not a Conservative cheerleader. But yes, freedom took a step forward today. Farmers will be free to sell to whomever they please, at whatever price they can negotiate. They can develop their own co-ops, OR NOT, and delivering a truck to Montana might one day no longer land a Western farmer in jail.

Dismantling the coercive monopoly of this CWB beast is a nice step. Rah-rah freedom, Thwim! Rah-rah freedom!

Anonymous

So you’re in favor of government appointed boards. Gotcha..

Anonymous

This is why I get sick of chatting with you, Thwim. What part of “delivering a truck to Montana might one day no longer land a Western farmer in jail” did you consciously choose to ignore as you reductio’d to absurdum?

The farmers will be able to organize however they damn well please. Allow me to surprise absolutely no one else around here by asserting that the CWB should never have existed in the first place, and should surrender its office space and employees to more productive uses, the sooner the better.

Anonymous

That’s very nice, but all completely irrelevant to the question I asked. As such, since I assume you’re not a moron and capable of reading, I took it that you were perfectly fine with the board being appointed by government, and so instead decided to comment on other aspects which weren’t at all related to what I was talking about.

Perhaps if you attempted to stay on topic in the first place you wouldn’t find yourself so frustrated. Then again, perhaps I should just stop making assumptions.
Anonymous

You snarkily asked about increasing freedom, as if a government plan to increase freedom was not, in fact, increasing freedom. I will leave to anyone “capable of reading” to sort out what follows.

Anonymous

The 80% of the farmers who grow about 20% of the wheat will no longer be able to ride on the coattails of the 20% of the farmers who grow about 80% of the wheat.

But the 80% of farmers group can continue to work together through the CWB to market their grain, which should help to minimize their future losses.

Anonymous

Assuming your ratios are correct, you really think that maintaining only 1/5th of their previous leveraging ability will minimize their future losses? Seriously? Remember, economies of scale aren’t just multiplicative, they’re exponential.

Anonymous

Not 100% sure about the ratios…I’m just using the well worn 80/20 rule – I’m reasonably confident that it applies to this situation. I’m 100% sure that each and every farmer does not produce the same volume of product.

And when I say minimize, I just mean that the smaller farmers should still make use of the CWB (or a similar cooperative, pooling arrangement) so as to maximize their profits rather than to simply have all of those small farmers throw up their hands and try to market their own product.

I do agree that if small farmers are currently making a profit of X, under the existing single desk CWB model, without the monopoly their profits will fall significantly, let’s say to 0.4X. By sticking with the ‘new’ CWB their profits will only fall to 0.5X; so by sticking with the CWB they will have minimized their losses.

Anonymous

No, it’s not their profits that will fall. It’s their total returns. Think about that and consider that most small farmers have to put around 80% or more of their returns straight back into the farm. Even if your numbers aren’t wildly optimistic (which I think they are given the small number of grain buyers) it suggests that the bulk of the small farmers will go belly up and have to sell out to the big agro-conglomerates. Which, if you happen to be one, is pretty cool as it increases your own monopoly power and the ability to extract every last dime from the end consumer.

For you and me though? Not so hot.

Anonymous

I understand the difference between profits and total returns. The relationship between the two is obviously fairly straightforward, so I’d say that we should be able to use either measure.

You, then, are making the case that profits for some/many/most of the smaller farmers won’t just drop to 0.5X as I guessed, but rather will drop to some negative value, and I could easily be convinced that that will actually be the case. As a group, the smaller farmers will find it more challenging to survive. More than just a few (those that are already just barely profitable) will indeed be driven out of business, and others (the larger, more established small farmers) will be pushed from being able to make a comfortable living to the edge of profitability.

My main point is that it will still be to the advantage of that group to work together through some cooperative arrangement, with admittedly a smaller market share, to make the best of their new reality.

As far as consumers like myself (and yourself?), I pretty sure that we will be unlikely to notice any significant difference in terms of the costs of finished products. (I agree that the bulk of the savings that might come from killing the CWB monopoly will go to large agribusiness, not consumers).

But the real question is on what basis should large profitable farms be required to subsidize smaller farms? If our goal is to save the family farm (ie a farm that is operated by a family of ~2 – 5 related individuals, with the help of perhaps 2 or 3 other paid employees), then let’s just have that discussion. I can see some merits in maintaining ‘family’ farms, but not sure that that is ultimately sustainable….
Anonymous

Well, we’re certainly in agreement on the main point, it’s almost always to people’s advantage when they work together. However, my question is as to whether it would make any significant difference. While it might be better to be shot in the head with a .22 rather than a .44, at the end of the day dead is dead.

As to your real question, I would argue the basis that food production is an important national service/resource. Certainly moreso than Air Canada, the postal service, or even health care. So in that respect keeping it healthy by ensuring that the system has plenty of redundancy and competition flourishing in it should be considered vital.

Now personally, I don’t feel the CWB is the best method of accomplishing that, and direct legislation or taxation incentive systems (on both the producers and the large purchasers) would in fact be better, but the CWB is what we had, and it’s certainly a step up from the simple anarchy that the CPC is proposing to drive through.
Anonymous

Working together…..an important criteria that helps to improve the likliehood of a successful cooperative venture is the variability of the various contributions to that venture. Specifcally, I’d wager that cooperative ventures where all of the participants are making relatively equivalent contributions can indeed lead to the situation where all participants come out ahead.

But in arrangements where there is a very wide range of participants it seems likely that you could end up with the situation where a smallish number of participants are making the lions share of the contributions, to the point where those participants are actually not gaining any advantage out of the cooperative arrangement – instead those participants are simply subsidizing the others. I’m pretty sure that is what is happening with the CWB, although perhaps not when it was first setup. If that’s what we want, then lets just say so…

Dead with a .22 or a .44…..yes, for some farmers this change (while maintaing a coop of some sort) will only make the difference you noted. For others it will make the difference between death and a survivalbe wound.

Bottom line…it would be great to have our politicians have the discussions that you brought up, and to put aside the unhelpful rhetoric such as:
- the CWB isn’t a single seller system, it’s a single buyer system, and
- these changes introduce choice, and more choice is always a good thing.

Anonymous

There’s something invigorating about considering whether Parliament can arbitrarily change a law that prevents Parliament from arbitrarily changing a law.
Pennyf

As a farmer, I find it scary that most of the users of the Wheat board voted to keep it but are being ignored by Harper and his cracker friend. This isn’t only about farmers and the Wheat Board, it is the attitude of this whole government.

Anonymous

Would you classify yourself as a farmer who farms a lot of land (ie more than 5 sections), a hobby farmer (ie you farm a 1/4 section or less) or in between?