Prairie Arms Race

by on Jul 12, 2016 in Blog | 3 comments

(July 7, 2016) Prairie farmers may remember former Harper Ag Minister Ritz assuring us that killing the Wheat Board would mean grain shipments would flourish.  Grain bin salesmen he said would be unhappy because without the Wheat Board grain shipments would go so quickly that farmers would no longer be interested in storing grain on their farms.

The exact opposite has happened.  There is now a grain storage arms race on the prairies.  On the one side farmers are expanding their own on-farm storage capacity and on the other the grain handling companies are building up their inland storage capacity.  The only catch is that prairie grain farmers will be paying for it all, either directly out of their own pockets or in the form of lower grain cheques as the private companies recoup their investments.

So why an arms race in grain storage?  The private grain handlers would like everyone to believe it is the fault of the railways for not responding to their orders on time.  However we know from the data of the December 18, 2014 Canadian Transportation Agency decision on the Western Grain Revenue Entitlement, which deals with grain movement, that this idea might be politely described asbusinessman’s puffery.”

A more fundamental reason for this goes back to a defect in grain and food markets which even Socrates noted some 2,300 years ago:  when there is a good harvest, grain is worth almost nothing in the market and yet scant months later, its value jumps.  Both market prices are irrational.

The political-economist David Ricardo characterized irrationally low post-harvest prices with the term “elasticity of prices” by explaining that “peoples’ bellies are not elastic” and consequently they will pay little or nothing for food once their stomachs are full.

So the arms race in storage is really yet another manifestation of this old wisdom.  Grain companies know that post-harvest farmers, especially younger ones, have bills to pay which presents the companies with a fine opportunity to purchase grain at a discount then dribble it onto the market later when prices are higher.  This is also why well-established farmers now want to hold grain in on farm storage.

On my last trip from Alberta down Saskatchewan’s highway 14 to Saskatoon I was struck with all the new bin space farmers along that road have built in the last few years.  These are not just a few hopper bins on skids – a lot of them are very large steel bins on concrete worthy of grain elevators from the past.  Even the cautious Parish and Heimbecker has seen fit to expand one of their terminals with what appears to be a large circus tent adjacent to their more substantial inland terminal.

All of this construction is designed, in one way or another, to take advantage of a defective food market.  Farmers are seeking to avoid being the victims of speculators and the grain companies are seeking to be speculators.

This defective market was addressed by the Saskatchewan farm leader Ed Partridge in the 1910s when he suggested price pooling and a single-desk seller for grain.  He did not live to see prairie farmers successfully implement the ideas of price pooling and the long success of the single-desk farmer controlled Canadian Wheat Board.

Nor did he live to see its destruction by the Harper Conservatives and their less than thoughtful agriculture Ministers.

The prairie arms race in grain storage has once again shown that the simple  nostrums of the Harper era were the product of short-sighted thinking and a basic innocence about commodity markets at best or vicious greed and stupidity at worst.  Whatever the reason, prairie farmers will pay for it all.

###

Ps:  When I was browsing in the independent book store McNally Robinson in Saskatoon I noticed a book launch featuring a local musician, B.D. Willoughby, and one of the songs on his new album is called “The Ballad of Ed Partridge.”  It’s a good summary of what Ed Partridge stood for.

Farewell Harper

by on May 26, 2016 in Blog | 1 comment

Harper communing with the invisible hand of the market Not exactly as illustrated

Harper communing with the invisible hand of the market
Not exactly as illustrated

(May 26, 2016)  This weekend the Conservative Party will hold its policy conference in Vancouver and Stephan Harper will give his swan song and by all reports resign his seat in the House of Commons ending the career of one of the odder politicians Canada has seen since the séance-attending Mackenzie King communed with the spirit of his dead dog over 75 years ago.

For farmers Mr. Harper first appeared as the head of the National Citizens Coalition when he fronted for a very well-funded attack on the integrity of the election process for Directors of the Canadian Wheat Board.  The NCC and its backers wanted to make the process subject to big money donations and other less than savory electoral practices the likes of which later landed some of Mr. Harper’s colleagues in jail.

Harper even attended a meeting in Red Deer, Alberta arranged by the industry captured Alberta Agriculture to drum up support for his dubious notions about the Wheat Board.  None of us knew at the time his dead-eyed stare and immobile face would become the trademark of a future Prime Minister.  At the time I attributed his reaction to the fact most of the crowd of over 100 farmers was not very enthusiastic about having their business interfered with by a callow ideologue who obviously knew little about the business and even less about international grain marketing.

However, once entrusted with a majority government Prime Minister Harper wasted no time in destroying the Canadian Wheat Board.  To his credit, he poured huge sums of tax money into making his fantasy dual market work – until the money and credit ran out.  Then his administration gave the remains to the Saudi Arabian Government and Bunge, one of the international giants the CWB was created to compete with.

The new Liberal administration in Ottawa is busily dismantling the many loony policies put in place by what in retrospect looks like a resentful and alienated group of teenage vandals.

However what can never be forgiven or un-done from the Harper years is the systematic destruction of Federal Research libraries including the libraries of the Agriculture Canada Research farms and field stations.

The Harper Legacy – Lethbridge Research Stn.

A little refresher.  Those libraries contained scientific monographs about all things Canadian in agriculture, health, and natural history dating back to the 1800s.  Each piece of scientific work represented, in some cases, the whole life’s work of a scientist, plant breeder, naturalist, or explorer.  Many were so rare that only one or two copies existed in the whole world.

The Harper Conservatives always followed the same methodology.  First they would cut the staff who consulted those libraries.  Then they would fire the librarians who managed the collections.  Once the librarians were gone, the remaining staff were told to salvage what they needed for their current research.

This made the collection completely chaotic and the only people who had the training and ability to manage it, the librarians, were long gone along with any budget to computerize the collections.  The Harper Conservatives then gave the order to put the libraries in the dumpster.  This is exactly what happened to 16 Federal Research libraries, 9 Agriculture and Agri-Food Canada research stations, the Health Canada Library, the Freshwater Research Library at the University of Manitoba, the Canadian Wheat Board Archives and Library, and others.

So that scientific work has been irreparably lost and the lives of those generations of researchers who provided base line information for us and future generations have been wasted.

There are some things the Harper Conservatives have done which are easy to change.  Respect for knowledge and evidence, farmer market power through collective bargaining, respect for the rule of law and the courts, ignoring or not signing abusive and undemocratic trade agreements all come to mind.  But what can never be undone is the destruction of priceless knowledge forever lost and the waste of lives that represents.

It will also take a long time to put the genie of hatred, fear, doubt, and distrust loosed by the Harper Conservatives back into that dark place it belongs.  As in post-war Germany, it will take a long time to rehabilitate the Conservative name and allow Conservatives a place in the civilized discourse of democracy simply because no decent person, understanding the implication of the great Canadian book burning can ever support Harper style Conservatives again.

Whatever Harper’s reasons for retiring now the Conservative policy convention this weekend in Vancouver has a delicate balancing act to perform.  On the one hand it needs to pay tribute to an odd and introverted man who dedicated his life to obtaining power for his decidedly un-conservative brand of Conservativism.  However respecting Stephen Harper’s single-minded dedication to that goal (his Herculean effort to master the French language in record time comes to mind) has to be balanced with a clear repudiation of the anti-intellectual book burners, bigots, and mountebanks that dominate the party Harper brought to power.

A Prairie Sentinel Falls

by on May 20, 2016 in Blog | 4 comments

(May 20, 2016) It may well be a universal human affliction to suffer from “home blindness.”  Many of us seem to think the wonderful places and great people are somewhere else.

Occasionally, however, the passing of someone reminds us that powerful individuals who will take their place in the history books for great deeds and great hearts also live here in western Canada.  Certainly the news that Roy Atkinson, farmer activist and the founding President of the National Farmers Union passed away a few days ago in Saskatoon marks just such a milestone.

Addressing CWBA convention 2011

Addressing CWBA convention 2011

I first met the legendary Roy Atkinson in 1976 when I was an undergraduate at the University of Alberta.  Even then he was a larger than life figure.  As a farm activist he championed the institutions which made it possible for many farming families to send their children through higher education.

At that time Roy was making the rounds with Les Benjamin, the NDP transportation critic, talking about that perennial western subject: rail transportation.  Roy warned us that changes to the Crow Rate would mean the farmer-owned grain handling cooperatives known as the Wheat Pools, which owned almost 90% of the grain elevators on the prairies would be forced to close most of their facilities and engage in a ruinous effort to centralize thousands of “prairie sentinels” into a few inland terminals.  It would, he told us, create huge hauling distances for farmers and ultimately undermine the single-desk selling system.

To this writer’s eternal shame, I scoffed at the whole notion.  Farmers, I thought, would not let their cooperative grain handling system be destroyed, let alone give up the market power they had achieved using the single-desk Canadian Wheat Board.  As events have shown, Roy knew better.  In 1976 there were a little over 3,900 primary elevators on the prairies, and now almost exactly as Roy predicted, there are a mere 327 licensed primary elevators left.

Roy and political prod

Roy and political prod

Some decades later I well remember Roy at the founding convention of the Canadian Wheat Board Alliance reminding us, while holding up a pitch-fork on a plaque (text below), that the only thing any politician understands is public pressure and the expectation of a more or less figurative pitch fork in the behind at the next election if they do not pursue the policies we want.

Roy’s death marks the end of an era in western politics where farmers were able to command government attention though their numbers.  Roy foresaw the dangers of commodity specific check-off groups fragmenting and thereby limiting the political power of farmers.  He strongly supported groups like the National Farmers’ Union that spoke for the common interests of farmers across the country.

It is often said that the first generation of a family builds the wealth, the second generation consolidates it and the third generation fiddles it away.  As the current generation of western farmers comes to the realization that the institutions which enabled them to create their wealth are no longer there, the work of the next generation will be to follow in Roy’s not inconsiderable footsteps, and rebuild that single, independent farm voice.

I would recommend reading this tribute from NFU members who worked closely with Roy over the years and we reprint Roy’s complete obituary as it appeared in the Star Phoenix here:

The pitchfork plaque reads:

 Presented with pride to R. Roy Atkinson, Advisory Committee member for District 6, 1965 to1994 by his friends on the 1991-94 Advisory Committee in memory of his staunch defense of the Canadian grain marketing system and the presentation to CWB commissioners in April 1970 when he instructed them in the use of this pitchfork to defend the CWB.

Alberta cleaning house

by on Apr 28, 2016 in Blog | 3 comments

ALMA first to go

(April 28, 2016) The recently tabled Alberta budget contained some pleasant surprises for farmers and some cost savings for a government dealing with falling oil prices that have exposed almost 40 years of financial incompetence by its predecessors.

In keeping with Premier Notley’s undertaking that appointed boards and commissions will be reviewed, the first steps were implemented with the budget.

Several destructive and ideological based commissions were discontinued, their appointed Boards dismissed, and staff redeployed to what one hopes are more positive pursuits.

The most notable elimination is the Alberta Livestock and Meat Agency (ALMA).  This agency boasted a budget of $28 million a year and a staff of 25.

ALMA was one of the of the three institutions, along with Alberta Agriculture and the Government’s Ag Financial Services  that put together Alberta’s grandiosely titled “Alberta Livestock and Meat Strategy.”  This document was a cowboy welfare wet dream – however, for export oriented grain farmers and Alberta’s cow/calf producers it was more of a nightmare.

In one of its later reports ALMA and company identified eliminating the Canadian Wheat Board as a method to reduce costs to cattle feeders.  The same report also identified eliminating Kernel Visual Distinguishability (KVD), which was a very effective and cheap way to identify grain varieties as another way to lower animal feeding costs.  As we now understand, the Harper government’s adoption of both these measures came at the expense of prairie grain producers.

Absurdly the organization also funneled money into something they called “Lean Manufacturing” to research automation technology for the meat packers.  Given there are only two firms (Cargill and JBS) that process some 90% of Canada’s beef, this thoughtful gift from Alberta taxpayers and ranchers to two of the world’s largest companies must have come as a pleasant surprise to them.

The Alberta strategy also included other measures to “focus on the development of high yielding varieties” and the establishment of an “Alberta Feed Grains Center of Excellence.”  High yielding varieties are already being more than adequately addressed by the Western Grains Research Foundation and a quick Google search for the Center of Excellence shows it was apparently more vapor-ware than real.

However, the money wasted by this organization was very real and the damage it has done to Canada’ reputation for high quality export grain and beef cannot be denied.  The announcement by Earls Restaurants that they had given up their three and a half year effort to source enough certified antibiotic and growth hormone free beef from Alberta for their restaurants demonstrates the wisdom of eliminating ALMA and reviewing the collection of agricultural boards and commissions that collect tens of millions of dollars from Alberta’s farmers and ranchers each year.

International Women’s Day 2016

by on Mar 8, 2016 in Blog | Comments Off on International Women’s Day 2016

Violet McNaughton

Violet McNaughton

On March 8th we celebrate International Women’s Day. It reminds this writer of how important women have been to agriculture on the prairies and the pivotal leadership role they played in establishing modern Canada.

Creating grain farms on the prairies was hard work and for the most successful settlers it was a team effort that relied on women and men working equally hard though not always at the same jobs.   Take for example the massive threshing crews whose work to bring in the grain at the harvest is so often highlighted at summer fairs across the prairies at places like the Birch Hills Threshing & Family Fun Day in Saskatchewan or Pioneer Days in Steinbach, Manitoba.

While it was mostly male crews that tossed the bundles into the thresher it was the women who made sure that the crews were fed and as often as not played a key role in organizing the farming operation and doing field and yard work during the rest of year as well.

International Women’s Day is a good day to recognize prairie farm women not only worked hard on the farm but organized and worked equally hard to extend democracy and social and economic justice. It was the Saskatchewan farm women who supported one of the very first attempts at Medicare in Canada.

One of their leaders was Violet McNaughton, who farmed with her husband, near Harris, Saskatchewan. They were both members of their local Grain Growers Association, one of many farm organizations dedicated to securing economic justice for grain growers. This is an organization where women took an equal role before the province of Saskatchewan would give them the vote.

Violet McNaughton, with the support of the Saskatchewan Grain Growers, was one of the women who organized petitions and campaigned for Saskatchewan women to get the right to vote. Some historians contend that McNaughton was such a formidable organizer and intellectual force that in fact it was the Grain Growers Association that had the support of Violet McNaughton!

With the help of the equally formidable Manitoban Frances Beynon, who campaigned for women’s suffrage in her own province, was an anti-war activist, and the women’s editor for the Grain Grower’s Guide paper, McNaughton organized the Women Grain Growers Association which drew its membership from farm women across Saskatchewan. The Saskatchewan Grain Growers gave this organization $500 in start-up money – about $10,000 in today’s money. When it came to supporting women’s equality they put their money where their mouth was.

Together Beynon and McNaughton joined other farm women from across the prairies to support the Famous Five who finally ended the abomination of relegating women to the legal status of horses and other chattels.

Farm women and men often had extremely limited access to health care including doctors and midwives. McNaughton campaigned for accessible medical aid and argued governments should pay for that health care.   McNaughton and the Women Grain Growers got both the Saskatchewan Grain Growers and the Saskatchewan Association of Rural Municipalities to pass motions supporting their campaign for medical aid. With this support for their campaign it forced the provincial government to pass legislation that let municipalities enact taxes to cover medical aid costs. Municipally funded nurses, doctors, and hospitals were the beginnings of the foundations of Medicare.

In spite of the fact contraception and birth control was illegal at the time, McNaughton and her supporters, also promoted “family planning.” This contributed to our contemporary, although still controversial in some quarters, understanding that women have the basic human right to control their own reproductive system.

So on International Women’s Day we should remember and applaud Violet McNaughton, Frances Beynon and their fellow farm women who began the campaign – strongly supported by the grain farmers of western Canada – to build the social and economic justice that would ultimately lead to so much that defines Canada today.

You can read previous International Women’s Day posts on this site from 2012, and 2013, and 2014.

For your viewing pleasure

by on Feb 29, 2016 in Blog | Comments Off on For your viewing pleasure

(February 29, 2016) Just in case readers are tired of the Oscars, for those of you with high-speed internet connections here are two videos that are of interest.

The first is a 14 minute video produced by the Canadian Wheat Board about 1990 or so which explains the history and operation of the Board in a dry but factual way.  All steak with very little sizzle as the marketers would say.

 

 

The second video is a 7 minute interview from December of 2014 with Dr. James Nolan, an agricultural economist with the University of Saskatchewan.  In it he talks about the so-called grain transportation mess.  Sounds very dry but for grain farmers it would easily qualify as a horror movie.

Not that Dr. Nolan is very scary, but what he says certainly is if you are a prairie grain farmer.  In a very careful academic explanation, he says that without the CWB we are now getting around 40 to 60% of the grain cheque and the grain handling companies are taking the rest.  Near the end he says his economic models show that as grain companies eat each other up we can expect to get about 20%.  Yikes!

 

 

Dr. Nolan did this interview shortly after we published our finding “Grain Companies Take Excess Profits” which you can read by clicking hereGrain-Companies-take-excess-profits-CONTEXT1.pdf

 

Later Dr. Richard Gray, also a University of Saskatchewan Agricultural Economist published a long paper detailing the same thing which you can download by clicking here

Basically Dr. Gray says we could have been $3.25 billion better off each year if we had kept the single-desk.  Given the last year of operation of the farmer-controlled single-desk Wheat Board generated a little over $7 billion in sales, Dr. Gray’s findings show the grain companies are taking about fifty percent of the grain cheque. Now farmers are only getting around 40%, which is quite a come down from the 90% or better they were accustomed to on wheat and barley.

As one reader said to me on this subject, “most farmers now get it that 90% of any given number with the Wheat Board is better than 40% without it.”

Lastly a thoughtful gift from Minister Ritz to some of his more dedicated followers:  you can see a copy of the announcement by clicking on this link:

News has it this organization will be holding its annual convention in New Orleans, Louisiana this year:  our tax dollars at work once again.

What’s the Wheat Board and why do farmers need it back?

by on Feb 23, 2016 in Blog | Comments Off on What’s the Wheat Board and why do farmers need it back?

Elevator and grain cars(February 23, 2016) First, let’s be clear.  The Canadian Wheat Board (CWB) was not a monopoly, or supply management, nor was it a socialist institution imposed on the powerless west to help a bunch of illiterate immigrant farmers as some would have you believe.

The CWB was more than just its office building, rail cars and grain ships.  The CWB was the most successful of capitalist institutions designed to work for prairie grain farmers in a globalized economy and compete with the other four grain companies that trade essentially all the other grain in the world.  The only reason it could do so was because it was the exclusive dealer of prairie wheat and barley.

The CWB had the legal authority to be the only seller of western Canadian wheat and barley for export and domestic human consumption.  While some call it a franchise and others call it an exclusive dealership, most called it the “single-desk.”  That meant all the grain processing industries in Canada and around the world who wanted quality assured wheat and barley for export or domestic human consumption had to purchase from the CWB.  Because the CWB presented a united front to the buyers on behalf of western grain growers we had market power to get the maximum value of our crops.

Compare that to now where farmers must go cap in hand to the big international grain companies hoping they are getting a better price than their neighbours or hire grain brokers to do it for them.  The CWB gave farmers 90% of world price or more while now we are lucky to get 60%, a loss to western Canada of at least $3.25 billion each year.

Click to enlarge

Click to enlarge

Our single-desk CWB was something uniquely Canadian which has been copied and renewed by others all over the world including in the US.  It provided quality assurance to customers giving western farmers an unrivaled international reputation for honesty and delivering premium quality grain.  For many years it was among Canada’s top ten net-foreign exchange earners.  Yet it never made a dime in profit and most years cost its farmer-owners nothing to operate.  It was the only grain marketer in the world that published an annual independently audited statement that laid out exactly what it got for selling grain and what it spent for doing that.

Many competitors hated the CWB and used the US government to launch 14 unsuccessful international court challenges against the Board, usually claiming it was undercutting prices, claims which turned out to be completely false.  This is also exactly what the Auditor General of Canada found when she was invited, by the farmers elected to run the CWB, to do a full audit.

There are two kinds of grain farmers on the prairies.  The majority are the successful ones who were supportive of the CWB.  The benefit farmers gained from the CWB was proportional so the larger the farmer the more they gained.  Successful smaller farmers also supported the CWB on principle, although many of them were too busy to actually worry about the details.Cartoon04

The other kinds of farmers are the minority.  Often embittered, this group is usually heavily in debt, often insolvent, attempting to grow their way out of debt by borrowing more money to rent more land, equipment, and inputs to grow their operations.  They can be described as the “know how, but don’t know why” group.

The farmer-owned single-desk Wheat Board took an undifferentiated product grown by thousands of farmers that is almost worthless unless it is amalgamated into the 30 and 60 thousand metric tonne lot sizes customers want;  branded it, promoted it, and then sold it for premium prices around the world.  To put that in context, a typical rail car holds a mere 90 tonnes of wheat and the CWB arranged to send some 350,000 of them containing identity-preserved wheat and barley to port each year.  The CWB returned the money to the people who produced the grain through a price pooling system that made sure all farmers received the full value of the crop over the year regardless of when they delivered their grain for sale.

Prairie farmers delivered their grain to 326 inland terminals across the prairies.  Then the CWB contracted with the railways to move the grain to deep water ports.  Just a handful of those inland terminals would store the whole of Ontario and Quebec’s annual wheat production.

The CWB chartered the ships to carry the grain, and made sure the ships got filled on time and on budget.  In the 14 years the farmers ran the CWB it never paid net costs for late shipments and never bungled a sale.  Last year, without the CWB, late fees (demurrage) topped $75 million. Cargil terminal

In CWB directors elections typically 80% of the Director positions went to farmers in favour of the single-desk.  Now that the results of the experiment comparing the CWB to the speculative market are in, even the debt-blinkered crowd is starting to see that 90% of any number is better than 60%.  No doubt their bankers are starting to understand that too.

We need the single desk back.

Parliamentary Dance

by on Feb 18, 2016 in Blog | Comments Off on Parliamentary Dance

Pride-And-Prejudice Country Dance(February 18, 2016)  On Tuesday we were treated to the usual Parliamentary Question Period dance.  Unlike those classic dance scenes in costume drama movies like Pride and Prejudice where the whole community works in synchronization, Question Period is more like crazed zombies interrupting a square dance while the Speaker of the House tries to keep order.

It was like that when the Leader of the NDP rose to ask the Agriculture Minister Lawrence MacAulay when he would re-establish the Canadian Wheat Board.

Mr. Mulcair was doing his job by raising a very serious issue for western grain farmers.  The evidence is now in that the private grain companies have taken $6.5 billion from grain farmers in the last two years.  As usual in Question Period the Conservatives were heckling.  It was not much of a surprise to see the former Harper Ag Minister sneering via Twitter about the effrontery of western grain farmers wanting natural justice to be done by restoring what was seized from them without due compensation or the vote he promised.

It would not have been unreasonable to expect Minister MacAulay, whose Prime Minister is already noted for un-muzzling scientists and promising evidence based policies, to respond positively to making it so farmers get back the roughly 60% of their grain cheque now being taken by the private oligarchs.

One sure sign the grown-ups are back in power is the ease with which the Agriculture Minister confounded the questioners on both sides of the issue.  Yes, he said, the Wheat Board had been sold  – apparently reminding the Conservatives that for this Minister a contract is a contract and he would not be seizing assets, no matter how they were disposed of, from G3 which is the combo of Saudi Arabia and Bunge one of the world’s giant private grain companies. But that is really all he said.

In the past, when confronted with the same economic structure as we see today both the Liberals and the Conservatives tried every conceivable combination of regulations and reforms to make the defective international grain market work without bankrupting western farmers.  After many things were tried and failed the single desk was the only thing that remained viable.  The Wheat Board’s marketing responsibility was renewed every five years by Parliament. Finally in 1967 all parties unanimously endorsed and supported a permanent single-desk, orderly marketing organization known as the Canadian Wheat Board.  It was the only way for farmers to have a level playing field in the international market.

Since then nothing has changed and the evidence is the same today as back then.  The only question is how long will it take for Minister MacAulay and the Liberals to look at the evidence?  How many farmers must get hurt?  How many domestic processors will be driven out of business by subsidized off-shore production and how long will Canadians tolerate eating bread and pasta from grain grown in parts of the world that are amongst the most heavily polluted on earth?

If we are talking about evidence based policy, a new single-desk marketing agency can be created.  We can name it whatever we want.  What we care about is that it gets premium prices for Canadian grain and supports local food.

Family Day hits keep coming for prairie farmers

by on Feb 16, 2016 in Blog | 5 comments

CWB cookbook 1995(February 16, 2016) Another family day domino fell this week with the report that a major Canadian food retailer was replacing pasta manufactured with prairie durum with pasta imported from Turkey of all places.

It should be remembered that with the single-desk Wheat Board pretty much all the pasta consumed in Canada was made with prairie durum. The Wheat Board had a policy of keeping competition among durum purchasers alive by equalizing freight costs for processors.

This meant more wheat and durum was milled and made into flour and pasta on the prairies than in the same grain growing areas of the United States. It also meant that the big eastern flour and pasta plants in Ontario used prairie wheat. It was a very profitable premium market for prairie farmers and took somewhere around 20% of our annual production of wheat and durum wheat.

This Wheat Board policy meant that essentially all the bread, pasta, and most of the beer in Canada was made with prairie wheat and barley. As this organization warned in 2011 “the end of the Wheat Board means the end of local food.”

Now the Wheat Board is gone along with its policies encouraging local processing. Combine this with very cheap ocean freight and it is apparently more economic for eastern retailers to buy Turkish pasta than it is to purchase locally produced pasta made with prairie durum. Ocean freight on 4,800 nautical miles from Turkey is apparently cheaper than dealing with the uncertain and unreliable private trade to acquire grain 3,300 miles away on the southern Canadian prairies.

Some Canadian pasta processors have complained this Turkish pasta is subsidized, and that may well be the case. However that ultra cheap ocean freight may also mean that sourcing wheat from the Ukraine, which is a mere 600 nautical miles away is now more economic than importing even heavily discounted prairie durum.

Speaking of Canada’s southern prairies, it was three years ago, on Family Day, that the giant American firm, Archer Daniels Midland announced it was closing its flour mill at Medicine Hat, in the center of prairie wheat country, and consolidating operations in Calgary.

The family day hits from the abusive and short-sighted Harper regime just keep on coming for Canadian families and the prairie farmers who work to feed them.

Some farmer funded Commissions living large

by on Jan 25, 2016 in Blog | 1 comment

(January 25, 2016) After Harper and Ritz killed the Wheat Board their ideological cousins in Alberta and Saskatchewan set up new farmer-funded Commissions to look after farmers’ interests.  Three years ago Alberta created the Alberta Wheat Commission (AWC) while Saskatchewan’s Wheat Development Commission (SWDC) has been up and running for a bit more than two years as has the Saskatchewan Barley Development Commission (SBDC).  All of them were modelled on the venerable Alberta Barley Commission (ABC).

Edsel Living Large

Another farmer funded trip – May not be exactly as illustrated

Manitoba took a more economical route by establishing a combined wheat and barley commission in mid-2014.  It has not been running long enough to establish a pattern of expenditures.  So for now, we can focus on comparing the corporate cultures of the four check-off organizations in Saskatchewan and Alberta.  Since the Alberta Wheat Commission’s (AWC) 2015 audited statement is not available as of January 21, this article is based on all the 2014 Audited Statements.

Readers may recall that in both Alberta and Saskatchewan every farmer who grows wheat and barley pays a production tax (innocuously called a “levy”) which is given to the relevant Commission.  Alberta farmers paid the AWC $6 million, and the ABC $2.7 million for a total of just over $8.7 million in 2014.  Saskatchewan farmers paid the SWDC $6.3 million and the SBDC $820 thousand for a total of $7.2 million dollars that year.

In Saskatchewan each levy paying farmer receives a ballot in the mail to elect the Commission’s Board of Directors.  On the other hand, in Alberta all it takes to get elected is a car load of friends showing up at a remote meeting – elections are not conducted with mail-in ballots so that they are accessible to every farmer who pays the levy.  It comes as no surprise there are stark contrasts between the democratically elected Commissions in Saskatchewan and Alberta’s crony models.

Living Large:  Staff

According to its audited statement Alberta’s Wheat Commission supports a staff complement of 12 people, five of whom are shared with the Alberta Barley Commission which has an additional 4 staff of its own.  The Wheat Commission spent $539 thousand on salaries while the Barley Commission spent $764 thousand.

In contrast the 2014 Saskatchewan Wheat Commission had just four staff and spent a mere $156 thousand on wages and benefits while SBDC spent $89 thousand on service contracts for the equivalent of just one and a quarter full time staff.

Living Large:  Publications

Much of the Alberta Wheat Commission staff seems to be devoted to telling growers just how great the AWC is with a ‘grower relations’  person in addition to two communications people, one of whom is also given the title of ‘events coordinator.’

In the AWC’s audit if you add up the lines for Communications $296,278.00, Meeting $169,588.00, and Administrative $161,712.00, these amount to $627,578.00 or about 20% of their Budget Expenditures.  If you add in the very broad Market Development category of $813,373.00 a whopping 40% of the AWC’s expenditures go to these items before a single seed is planted or scientist funded.

Presumably a good time is had by all, but just in case farmers footing the bills missed going on that last Asian junket the AWC/ABC produces a glossy magazine published four times a year.  It costs a tidy $60,000.00 per issue plus the staff time of both a managing editor and a sales and production coordinator.  Advertising off-sets only about 8% of the magazine’s cost.  At this point farmers paying the AWC/ABC check offs might be wondering if paying for this magazine and effectively subsidizing companies advertising to them is really the best use of their money.

This reflects the Alberta Conservative tradition of lavish spending on propaganda.  Under Premier Ralph Klein and his successor administrations the government’s “Public Affairs Bureau” censored all Government-issue communications from Cabinet Ministers down to the lowliest dog catcher.  Dubbed variously “the Ministry of Truth” or “Edmonton’s Pravda,” it was said to cost more and have more staff than the same department in the White House for the President of the United States.

So it is no surprise the corporate culture of the Klein era carries over into the Alberta Wheat and Barley Commissions.  In fact the top check-off commissions in Alberta took a total of $31 million dollars from Alberta farmers in 2014.

Contrast this with the lean but not mean staff at the Saskatchewan Wheat Development Commission.  In 2014 the SWDC Board of Directors increased their staff from three to four with the hiring of a Research Program Manager.  A good hire since the whole point of these commissions was to fund agronomic research.

SWDC publishes three simple newsletters a year heavy on text and agronomic information about things like the development of wheat cultivars resistant to fusarium and evidence-based responses to economic and customer quality concerns.

Allison Redford

Alison Redford

Living Large:  Travel

Speaking of Alberta corporate culture, the dizzying international travel of the Alberta Wheat Commission people reminds this writer of the Alison Redford era in Alberta – except she mostly flew around Alberta.  In 2014 AWC staff and directors traveled to Venezuela, Colombia, Chile, China, Singapore, Malaysia, Thailand, Vietnam, Indonesia, England, Spain, Italy, Germany, Algeria, Tunisia, Morocco, and the United Arab Emirates.  Perhaps this travel schedule explains why the Alberta Wheat Commission spent less than one third of its expenditures on research.

In contrast the wild bunch at the Saskatchewan Wheat Development Commission toured research facilities like the Crop Development Centre at the University of Saskatchewan, and the Kernan Crop Research Farm in Saskatoon.  They also took a southern trip but it was to the Semiarid Prairie Agricultural Research Centre near Swift Current, Saskatchewan.  This shows the SWDC is laying the ground work for supporting real world research into wheat at recognized scientific institutions on the prairies.

Without a complete house cleaning and forensic audit of the activities of the various Alberta check-off commissions, it would at least be refreshing to see the new Alberta Government revamp the Alberta commissions and enforce democratic elections which are open to all farmers not just the ones who have the free time to travel to distant meetings to get elected by their friends.