Harper (center) and followers – may not be exactly as illustrated
(Aug. 2, 2012) On the day before his legislation ending the single desk selling authority of the CWB came into effect Minister Ritz indicated there were at least two unidentified entities looking at purchasing his Con Wheat Board.
Ritz is quoted as saying the CWB has “. . . a tremendous Rolodex of marketing (contacts) around the world and (prospective buyers) wanted to capture that.”
This comment certainly indicates political spin is alive and well. Why would anyone be interested in purchasing a grain marketing company, even one with the sterling reputation of the old Canadian Wheat Board, when it has no significant assets? The Minister is simply repeating this bit of nonsense to leave the impression that his legislation did not actually do what his critics said it would do: render one of the largest and most well respected grain marketing organizations in the world largely useless and valueless.
But isn’t that Rolodex of CWB customers valuable? Not really, in fact, the CWB’s customer list was never a secret. CWB shipments went out on rail cars and through port terminals run by its commercial rivals, so there were no secrets there. Does anybody really believe the CWB shipped almost 20 million tonnes of wheat and barley every year and no one knew where the ships went and unloaded? Hard to believe even Mr. Ritz’s most gullible supporters could really believe that.
Fourteen international trade tribunal investigations all demonstrated the CWB got better prices for Canadian grain than the private trade was doing, as did the CWB’s annual audited statements. So there were no secrets about what the CWB was charging customers either.
The thing of highest value that the CWB possessed was the exclusive legal authority to sell Canadian wheat and barley for domestic and export human consumption. Call it the single desk, an exclusive dealership, or call it collective bargaining authority, but whatever you want to call it thanks to the Harper administration, it is gone, at least until the Courts reassert the rule of law and restore our farmer controlled Wheat Board.
Without the single desk, the CWB has only price pooling to offer farmers. The CWB has to go cap in hand to its commercial rivals to handle any grain sales it makes, and as Minister Ritz’s many critics have pointed out, those rivals are not likely to give the CWB much of a break on handling charges or priority for CWB sales when they have their own to make. The fact Ritz’s Conservative Wheat Board has managed to secure handling agreements at only 130 sites, which is about 20% of the elevators across the prairies, shows just how fragile the new CWB is. (Note: in a later announcement the CWB increased this number to 170 sites)
So Minister Ritz and his dreamy libertarian supporters are now living in a sort of fool’s paradise. The U.S. is undergoing the most extensive drought since 1896 and grain prices are rising, but that is temporary at best. By removing the CWB from exclusive marketing of Canadian wheat and barley, Minister Ritz has effectively cut farmers off from those higher prices. Indeed, without the CWB, we now have no real idea of how much of those world prices the private trade is willing to allow the CWB to pass back to Canadian farmers.
Perhaps the only reason left to purchase the CWB is if it comes with the $200 million dollars of farmers’ money in the old CWB bank account seized by Minister Ritz and the $300 or so million of taxpayers’ money he just dumped into the organization. Minister Ritz’s Con Wheat Board should be worth at least that much, but not much more.
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