Your Reading List

Market Power: 50 Years Forward, 50 Years Back

As a farmer, I m alarmed at an elected government denying farmers a say in arguably the most important question in the history of Prairie farming.

Without the marketing and representative power of the Canadian Wheat Board, grain farmers would be a scattered bunch of thousands peddling their wares to a handful of powerful grain buyers.

When we began farming in the early 1960s, we inherited legislated access to producer cars, the benefits of the Crow freight rate, farmer-owned Prairie Pool co-operative elevator systems, a well-funded Canadian Grain Commission, a world-class national research and quality controlled public seed program, and the Canadian Wheat Board.

In 2011, only one remains. The Crow and the Pools are gone, the research is being starved and/or turned over to the private conglomerates (creating enormous new seed cost), and the grain commission, under a fee freeze since 1994, has been ordered to balance its books without government funding. The CWB is fighting for its life.

At the time, the Crow removal was heralded as a new golden era of prosperity and development for Western Canada. Compensation is scarcely covering two years of freight at the new rates.

Since its loss, $720 million is scooped out of the western rural economy annually and dumped into the pockets of Canada s two uncompetitive railways.

The Pools fell victim to a more subtle process runaway hired management, boards who failed in their fiduciary responsibility to farmers and that ever-unfailing good old producer apathy.

In the post-Crow, post-Pool era, the new streamlined and efficient grain transportation system has downloaded enormous expense to farmers in increased cost of hauling, purchase of large trucks and wear and tear on roads.

Farmers are also left paying for the new system, demolition of the old one and buying new on-farm grain storage as the new system fails to match the handling capabilities of the old one.

Under all these improvements farm export values have tripled, but real farm incomes have been halved and farm debt doubled over the past two decades.

WEAK CONCEPT

For the first time in their decades- long battle to eliminate the CWB, the private grain trade at long last has this biggest prize of all in its sights.

The old smoke-and-mirrors game is still on. What amounts to an open market is being presented as marketing choice.

For farmers, choice inevitably means no choice. For grain companies, it is the ticket back to their glory days circa 1900.

CWB survival without the single desk is a concept so weak it doesn t merit consideration. The board would require use of handling facilities owned by companies that have wanted it dead for decades. A dual board would lose its exclusive control of a relatively rare northern climate- grown class of bread wheat deliverable to end-users from a system regulated to guarantee safe and consistent quality.

Competitors also would have access to that same product and the CWB would be immediately in a bidding-down process for orders.

As a seller, in order to earn top dollar, you need to have sole control of a product or you need to be cheaper. Period.

Should the feds succeed in axing the CWB, the grain giants would be rid of those pesky producer cars, rendered unavailable without the CWB to co-ordinate car supply and act as a seller at port terminals.

This, in turn, would kill the fledgling short line rail companies. These lines purchased at great cost by local farmers and a necessity for producer car movement, allow grain to keep $1,200 up to $1,800 per car out of greedy corporate hands and back in rural communities.

There would then be no need for those equally pesky trucking premiums now used to lure grain past the producer car-loading sites. The Port of Churchill, surviving for decades on CWB shipments and in spite of politics, would be done for as the grain giants send all grain through their own East and West Coast terminals.

Without the advocacy of a powerful farmer-owned $5-billion corporation, grain commission fees could increase exponentially, regulations could loosen, or the feds could fall back on that old right-wing favourite and privatize the CGC. Railways could see a loosening of restrictions on freight charges. (Mr. Ritz has already stated publicly that he would be willing to pay more.)

Winnipeg and the province currently benefit from approximately 440 well-paying CWB jobs. Winnipeg s status as world grain trade centre and location of private trade head offices, and the Canadian International Grains Institute would eventually fade.

This is a politically engineered expropriation without compensation.

In a food industry otherwise controlled by a handful of giant corporations owning entire supply chains (from fertilizer to the grocer s doorstep) the free market and marketing freedom are myths.

The days of developing a significant value-added on-farm business (as we were able to do for approximately two decades) are already gone. The food giants are well along in the process of owning the marketplace and excluding potential intruders from their playground.

The CWB cannot survive in any useful form without single desk. Without the assured supply of a monopoly, the board would be unable to make forward sales to take advantage of market peaks. Since unenforceable farmer contracts are not bankable, there would be severe limitations in CWB cash and credit availability.

Author Raj Patel formerly of the World Bank, WTO, and United Nations observes in his bookStuffed and Starvedthat The modern food system is being designed to siphon wealth from rural areas, with just enough left to keep people quiet.

To paraphrase his conclusion, collectively, farmers can bargain. Individually they have to beg. Beverly Stow farms near Graysville, Man.

About the author

Comments

explore

Stories from our other publications