Grain barons toast Minister Ritz. May not be exactly as illustrated

(December 5, 2012) Last month Gerry’s Canadian Wheat and Barley newsletter reported more ships were waiting longer in port, and that almost none of the current crop was contracted for.  International customers are complaining about poor service and worrying about quality.  Farmers across the west were reporting problems with grain deliveries and many were wondering if the west has a plumbing problem.  However, since that news, farmers have been treated to a steady stream of feel good propaganda claiming record grain shipments with all quiet on the western front now the nasty farmer-controlled Canadian Wheat Board is gone.

The Conservatives even helped to pay for a party last week in Ottawa to celebrate.  They flew in the usual cheerleaders representing astro-turf farm groups with fewer members than most bird watching clubs so they could, as one astute journalist wrote party like it was 1942.  In front of the Commons Agriculture Committee they testified how wonderful everything is before filing over to a “National Grain Symposium” organized by another astro-turf group.  The more dutiful stenographers in the agricultural press repeated the claims by private traders and grain companies that everything was for the best in this new best of all possible worlds.

Meanwhile the Regina Agribition launched a new presentation nostalgically titled “Grain Expo.”  A collection of speakers sponsored by various industry groups was headlined by Cargill employee Tyler Russell whose main message seemed to be that the basis will “widen out” now that the farmer-controlled Wheat Board is gone.  As one farmer said of the presentation, “[it] helps farmers feel good about paying more for grain marketing.”

But what is the evidence saying?  The short answer:  there is little evidence and even less context.  There is not much publically available information on anything of significance to farmers in the grain trade.  Even long time opponents of the farmer controlled Wheat Board are now on public record complaining about secrecy and the need for new regulations to enforce transparency.  (“Regulations, farmer voice needed in post-CWB monopoly world” – Manitoba Cooperator, Nov 22/’12)

A little common sense tells us the private trade, including Gerry Ritz’s Con Board, have no reason to complain.  Any extra costs for moving grain to export are simply downloaded to farmers in the form of lower grain cheques.  We do know there is a worldwide drought and grain prices on the international market are somewhat higher, but we have no idea if the prices some farmers are seeing are high enough to reflect those market conditions.  We know the farmer-controlled Wheat Board returned better than 90% of grain prices back to farmers while the private trade has a whole bunch of shareholders, bond holders, speculators, and others to pay long before the farmer sees any money.

We also know in a rising market it does not take much talent to flip a product for a profit.  So it is no surprise that grain companies, whose main claim to fame is margin trading, and their astro-turf cheerleaders are partying in Ottawa now the farmer-controlled Wheat Board is gone.

The west may or may not have a plumbing problem when it comes to grain movement, but without the farmer-controlled Canadian Wheat Board there is no plumbing problem when it comes to siphoning money out of farmers’ grain and into the pockets of the private trade.  No wonder they were toasting Gerry Ritz in Ottawa last week.

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