(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).
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.
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.
(January 23, 2016) I got the news this week that one of my favorite publications is no more. G3, the joint venture between Saudi Arabia and Bunge, which acquired the hard assets of the farmer-controlled Wheat Board, has announced they are sending out their last Market Outlook Newsletter.
Written by the remainder of the Wheat Board’s marketing staff, this is the wonderful newsletter that in February of 2014 blew the whistle on the private grain companies ripping farmers off for billions of dollars between the Vancouver port price and the prices they were paying farmers on the prairies. CWBA published an analysis of this, issued a news release and has updated the material from time to time and will be again.
A few weeks after we issued our news release, Dr. Richard Gray, an eminent agricultural economist from the University of Saskatchewan came to the same conclusions and issued a damning report which he updated in August of 2015 showing the grain trade took an extra $5 to $6.7 billion over the past two crop years from western farmers as excess profits.
The last issue of the Market Outlook Newsletter again showed the integrity and dedication to prairie farmers typical of the CWB’s employees as they put a small gem into their farewell Newsletter confirming once again just how critical the single-desk and orderly marketing really is for western Canada’s farmers.
Look at the gem I bolded and underlined in the quote below. CWB staff has again let the truth of the matter slip out:
“The weak Canadian dollar has sheltered some of the sluggishness in the grains and oilseeds futures markets. A similar trajectory has been experienced by many of our competitors for grains and oilseeds export market share. In fact, farmers in the Black Sea region and South America have seen locally denominated prices reach near or absolute record levels.”
Seeing this we must ask: are western Canadian elevator prices at the same record highs we see in other countries with declining currency values? They certainly should be with the Canadian dollar now down by 30%.
However, the answer is a resounding “no.” Translating our prices into US dollars shows we are now getting depression era prices for our grains. Somebody isn’t getting paid all that they’re owed and you can bet it is not the grain companies.
So thank you to the anonymous CWB employee for having the integrity to once again tell the truth.
Their final news letter quote said: “There is no real ending” and western farmers will not let the story stop here.
(January 13, 2016) Over the past year Canadians cut off a number of things, most notable of which were neo-conservative governments in Ottawa and Alberta. For some the shell shock has hardly worn off.
2015 also marks four years since the Harper administration created mighty and lasting grudges on the prairies by killing the Canadian Wheat Board in an undemocratic and legally dubious process. At this distance a number of things have become painfully clear:
– The farmers’ share of the international grain price is down by at least half and likely more. Agricultural economist Dr. Richard Gray of the University of Saskatchewan has published several papers demonstrating that farmers ought to have at least 50% more dollars from their grain sales than the middlemen of the private trade are giving them.
– The annual audits of rail performance carried out by the Canadian Transportation Agency in the 2013/14 and 2014/15 crop years show the claim of the grain trade that poor railway performance is causing high basis levels is false. In fact the low prices farmers see are really the result of excess profits taken by the grain trade.
– Prairie farmers have gone from being major exporters of grain with direct relations to end-use customers through the Wheat Board to being held captive in a domestic market by just a few giant grain handling companies and their agents.
– Canadian farm debt has now topped $90 billion dollars. Many economists thought when we broke the $50 billion mark that level was unsustainable. Anyone looking at the amount of unsold machinery sitting on dealer’s lots across western Canada or reading of the further consolidation of farm equipment dealers and manufacturers knows something is broken.
– It is not possible to remove more than half of the wheat and barley revenue from western Canadian farmers, double the farm debt level, and have the west remain as prosperous as it has been.
– The real grain price situation for farmers got substantially worse in 2015. Grain is priced in US dollars and because the Canadian dollar has lost 30% of its value the domestic grain price for western farmers should have increased accordingly – if there was really such a thing as a market – but it did not.
Instead the price for number one wheat in Manitoba is effectively $4 US a bushel, a price not seen for decades, and if you adjust for inflation, it is a price closer to great depression levels than ever before.
Free market farmers touted modest Canadian price increases as proof things got better without the CWB. The numbers show they are living in a fool’s paradise. As Dr. Gray observed of 2014/15:
“Yes, (western) farmers had a good year, but that doesn’t take away from the fact they could’ve been several billion dollars better off.”
Certainly the results of planting rather than cutting off ideology are still plain to see in the Alberta Check-off commissions. At last report the Alberta Wheat Commission was planning to investigate what grain was actually selling for at port. Something they announced with much fanfare last year as well.
As said here before, the actual sales price the private trade gets from end-use customers are amongst the most closely guarded secrets of the grain trade. These sales prices have only a casual relationship to port prices, and reports of port prices are unreliable at best. I can only assume the worthies on the Alberta Wheat Commission have been watching too many James Bond movies and plan to skulk around grain company headquarters listening at keyholes.
So in many ways 2015 was a recap of 2014 with the usual suspects’ ignoring the loss of money to prairie farmers and the ominous growth of farm debt. We can only hope 2016 sees the continued cutting off of the ideology planted by the Harper regime over the past nine years.
(January 1, 2016) This Canadian New Year brings much hope for western grain farmers. The Prime Minister has promised to demolish the Harper legacy “brick by brick” and has already started to do so by un-muzzling Federal scientists. His administration is even looking at re-opening the prison farms which the Harper Conservatives closed with their typical contempt for cooperative rural values and skills.
A joyful graphic celebrating this reminded me of the courageous Manitoba university student, Bridgett DePape who used her position as a Senate page to hold up a “Stop Harper” sign in 2011.
One of my favorite pictures on our Facebook page is of farmers in east central Alberta taking time out from loading wheat into their producer rail cars to do the same thing a few weeks later. Courage and integrity can wear many clothes, from the finery of a Senate page to work clothes on a dusty rail siding.
In the 1950s when there were a lot more people in rural Canada a favorite scam of American hucksters was to travel to the small towns and farms on the southern Canadian prairies offering to put a petrochemical sealer on home roofs. The sealer was usually a mixture of used motor oil, grease and a bit of saw dust which disappeared not long after the money and the Yankee hucksters were gone. People soon figured out the scam and the Canadian border was closed to the scammers from the south.
Canadians, like Albertans have finally expressed their judgement on the equally mendacious scammers of the American tea-party variety who managed to highjack the Progressive Conservative Party and even our country for a time. We now expect both our Prime Minister and the new Alberta Premier to dismantle this legacy brick by brick. As Premier Notley remarked in her New Year’s Address, “elections have to mean something.”
Last year the farmers of the CWB Alliance voted to reaffirm the mandate of this organization to work towards the restoration of a single-desk grain marketing agency for western Canada. With the results of the Federal election and the election of a strong and stable NDP government in Alberta that goal now appears much closer than it did this time last year. Progressive Liberals and the NDP have always supported the single-desk Wheat Board and even Saskatchewan’s Conservative premier supports single-desk marketing when it comes to potash.
Restoring orderly marketing and Canada’ place as an honest food supplier will not be easy, and the Liberals will be bombarded with many bogus arguments. However we know that sooner or later the facts are always friendly to orderly marketing though a single-desk whether it is for commodities like wheat, almonds, or potash. Our biggest issue will be effectively engaging with the new administrations in Ottawa and elsewhere. I know there is no shortage of courage or will in the farm community for the job ahead.
(December 30, 2015) Earlier this year a think tank held out the carrot of population growth to encourage prairie farmers to go further into debt to purchase crop inputs and technology to increase production. I was reminded of this again a few weeks ago when a couple of colleagues sent me a note from a private grain trader claiming “Canadian families save 58% on their weekly grocery bills thanks to modern crop protection and plant biotechnology tools.”
As my colleagues pointed out, this is nonsense. There is less than six cents worth of wheat in a loaf of bread, so even if the price of wheat doubled bread prices should not really increase. Four bucks worth of barley makes 400 bottles of beer and so on.
The price of organic produce in the store is only marginally higher than conventionally produced food yet the organic farmer is paid a premium of two to three times more compared to what a conventional producer gets for the same crop. So the claim all those expensive crop input products and genetically modified grains like canola, soy beans, and corn are saving consumers money is dubious at best.
Market power plays an important role here. Organic producers are still few in number and their overall production is strongly exceeded by consumer demand for organically produced food. As a result, food processors and retailers are prepared to take very slightly lower profits and pay organic producers substantially more.
For conventional farmers the market power they once enjoyed through cooperatives and marketing boards has been stripped away over the years by the relentless demands of the oligarchs of the private grain, chemical, and seed trade to generate ever higher profits for their shareholders. Now the same oligarchs are pushing to extend their power over both consumers and farmers by controlling the genetics of all food crops.
With the signing of the UPOV91 treaty by the Harper government and the continual pressure on farmer-elected commodity commissions to privatize public plant breeding, not to mention the wholesale destruction of Agriculture Canada’s research farms, it would appear the oligarchs are getting closer than ever to eliminating all farmer market power and along with it any choice consumers and farmers have over how food is developed, grown, and marketed.
It is now virtually impossible for western farmers to grow canola which has not been genetically modified, and the trend seems to be to extend this situation to all other grains as well. Ultimately, this is yet another cost imposed on both farmers and consumers and another profit center for the giant agro-chemical-seed companies.
In spite of the self serving nonsense about feeding the world that comes from the private trade, neither farmers nor consumers benefit from either extra production or the astronomical profits now taken by the oligarchs who own and control the food system thanks to the neglect, ignorance, or sheer venality of successive governments.
The National Farmers Union published a report documenting all this in very substantial detail. You can view the summary here.
Or you can download the complete report.
(December 23, 2015) Among many important things, the holiday season is a time for good cheer and general amusement. So with that in mind, readers, especially prairie grain farmers, may find this breathless BBC report of a “mega” Australian grain train pulling a whole 73 cars of wheat grown near Narrabri, New South Wales to the coastal port of Newcastle amusing – not the least for its “gee whiz – ain’t those Aussies amazing” tone.
A friend of mine who raises wheat near Regina laughed and said “I see five or six trains a day past my place that are easily twice that long.” A reminder that western Canada lives or dies by its grains and trains.
But the BBC report is sobering as well. That Aussie train was carrying wheat competing with our prairie wheat for the lucrative Asian market. However it was heading downhill over flat terrain for a mere 400 km to deep water. Compare that with our own grain moving almost 1,800 km from Regina to deep water at Vancouver. In contrast to permanently temperate New South Wales in Australia, western Canadian sourced grain has to cross the prairies, where occasionally temperatures can be bracing, then climb over three mountain ranges to Vancouver.
There are less than 300 nautical miles difference between Vancouver and Newcastle, Australia to Kobe, Japan, so the critical difference in transportation costs comes down to the huge difference in shipping by rail to deep water between the prairies and Australia’s wheat growing area.
This extra distance is a cost disadvantage, and now provides the private trade with an excuse to pay lower prices to prairie farmers. When prairie farmers owned and marketed wheat through the single-desk Canadian Wheat Board, this disadvantage of distance was more than compensated for because the Wheat Board carved out an international niche market based on the reliable supply of high-quality grain direct to end-use customers who paid premium prices which the Wheat Board passed back to prairie farmers.
Prairie grain is no longer owned by prairie farmers thanks to the end of the single-desk Wheat Board. That grain is now owned by the same giant companies that own Australian wheat and premium prices for western Canadian farmers are long gone. So when it comes to making money “who ya gonna call” if you are one of the ABCD group of companies and you own and effectively control all the tradable grain on the planet?
The answer to that is pretty clear. The ABCD group of companies are perfectly happy to take western Canadian grain off the hands of farmers, but at a much greater discount than ever before simply because they now can. As predicted by both the former Wheat Board and its many supporters, western Canada is becoming a residual supplier of wheat to the world market and that is reflected in our smaller share of the world price.
So in the spirit of Charismas we can only recommend reading The Ritz who killed the Wheat Board to your farmer colleagues, especially those in dairy, since grain farmers already know how it comes out.
Broken bond of trust between rural Alberta and government not healed by NDP election
(December 1, 2015) Readers from outside Alberta may be amazed at the tempest being generated over the Alberta NDP government’s move to protect Alberta’s farmers and ranchers from ambulance-chasing lawyers and private disability insurance providers. What could there possibly be to dislike about Workers’ Compensation (WCB) legislation (Bill 6 – “Enhanced Protection for Farm and Ranch Workers Act”) which not only provides people employed by farmers with disability insurance but makes their farmer and rancher bosses immune from lawsuits?
Nothing at all really, aside from a few technical details easily ironed out in the regulations as they have been in other provinces. But that has not stopped a swell of outrage and a well orchestrated protest fanned by fears being spread by extreme right-wing groups associated with the almost as extreme Wildrose opposition.
However, the reason this nonsense has so much traction is an entirely justified distrust created by the decades of abuse of process by the Government of Alberta aimed at rural landowners. The well-documented instance where supposedly impartial government energy regulators hired spies to snoop on landowners, violate their lawyer-client confidentiality, and pass the information on to private energy companies is only one example among many.
In this context wild and inaccurate fears of heavy-handed government inspectors counting the hours children spend gathering eggs for grandma or farm and ranch husbands and wives having to register for WCB coverage and being forced to knock off work after eight hours during calving or harvest season have credibility with rural Albertans and have been widely circulated.
However the real villains in this whole debacle are the neo-conservatives that have long found a home in Alberta’s bureaucracy and later infested Ottawa under the Harper regime. The drafting of this legislation and communication about it was left in the hands of Alberta government bureaucrats. Now there can be little doubt they certainly bungled, and perhaps sabotaged the NDP’s efforts and created much fear, uncertainty, and doubt in the rural community as a result. Why else would they have provided such scatter-gun legislation with information about it spread across 10 wordy and almost incomprehensible fact-sheets spread across the province’s web site?
They left the new Occupational Health and Safety Minister Lori Sigurdson and Agriculture Minister Oneil Carlier spinning in the wind on this one. So there is a lesson here for the new Liberal administration in Ottawa which is as valid today as it was in the 16th century when Niccolò Machiavelli advised a new administration to swing the ax widely when it first took power.
This type of bungling by the Notley NDP should be a sobering lesson to the new Trudeau administration that they immediately need to swing a wide ax across the top level of the civil service and the appointed Boards and Commissions if they expect the machinery of government to run smoothly for Canadians.
The likeable but badly stumbling Notley government has provided an object lesson to Ottawa Liberals on the importance of the de-Harperfication of the mechanisms of the state. Until this happens, Canadians, like Albertans, will not be able to have confidence that their governments are operating impartially and their democratically expressed preferences are not being sandbagged at every step by an illegitimate cadre of ideological zealots ensconced in the public sector pretending to be civil servants.
(November 25, 2015) Last week I was heading to town and saw my neighbour’s two combines and a truck out in the field straight combining some standing canola. This is a relatively new practice and doing so next to the eastern slopes of the Rocky Mountains near the end of November certainly says something about climate change and so-called technological progress. In this case it is claimed newer varieties of canola with thicker pods have made straight combining feasible but the seed to plant such a crop comes from a giant agro-chemical-seed company and is very expensive.
It is farmers who pay the real cost of this high input model and provide astronomical profits to the agro-chemical-seed companies. Known as the “canola model” and promoted by these giant companies, it entailed the privatization of the canola genome once paid for by farmers. Now canola not only costs more for variety development and delivers poorer results, but imposes those substantially higher costs on farmers, as any farmer growing canola can testify.
My neighbour out harvesting in November trying to salvage a canola crop which cost a fortune to plant and now having to worry about his canola crop becoming worthless as it goes rancid in the bins is paying that price.
In spite of evidence to the contrary, there are still some farmers who think following the canola model in wheat and barley would be a good thing. We know consumers have no desire to eat genetically modified food and most farmers understand that giving up their ownership of grain genetics to the giant agro-chemical-seed companies just means higher costs for them.
It will therefore be interesting to see if farmers use their mail-in ballots in the Saskatchewan Wheat, Pulse, and Barley Commission elections due at the end of this week to support candidates with their interests at heart or will they vote for those supporting the canola model.
(November 23, 2015) I suppose it had to happen sooner or later. From the Bizzaro world of the Frontier Center, where black is white and up is down, comes the absurd claim that Canada’s grain grading system is the laughing stock of the world. This claim, apparently designed to sow fear, uncertainty, and doubt (FUD) was recently published in the National/Financial Post, one of Canada’s largest privately subsidized newspapers. It comes from another largely anonymous group claiming to represent farmers calling itself the “North American Grain Grading Group.”
Now the fact is Canada has long been uniquely successful in the world grain trade by staking out its niche as the producer of the highest quality milling wheats, durum wheats, and human consumption barley in the world. However, it was not long after the Harper government killed the Canadian Wheat Board that our former customers, like China and Japan, started to publically complain that the reliable delivery of high quality grain was no longer happening.
Instead of apologizing to western farmers for cheer-leading the greatest grain robbery in Canadian history, the commentators and Astroturf groups that pushed to kill the CWB are now pushing to kill our high quality oriented grain grading system. That would be the system which our customers are complaining is no longer being enforced now that the CWB is gone.
This in spite of the fact the Frontier Center commentary acknowledges that the system they helped to create with the killing the CWB allows “global grain buyers to snap up downgraded Canadian grain and turn around and sell it – at a much higher price – to millers around the world.” By blaming our grading system they may hope to spread doubt this is really the private trade using its new market power to cheat farmers of the full value of their high quality wheat.
Once again we have short-sighted FUD being sown about one of our strengths, in this case the Canadian Grain Commission and our high quality oriented grain grading system.
This is foolish enough, but when you consider that this Canadian quality assurance system evolved to overcome our comparative disadvantages of climate, distance to deep water ports, and long ocean freight distances, the argument to dismantle it seems self-destructive at best.
Here in Alberta the adults are at last in charge and Canadians recently voted to throw the wreckers and book-burners out of Ottawa. Here’s hoping that the new administration in Ottawa has the intellectual heft to see this call by the Frontier Center and its friends for what it is: just a small group (I’m betting they have fewer than the 130 members admitted to by the Western Barley Growers Association in court documents) making the case for a private grain trade that no longer has any credibility with either farmers or our international customers.
(Oct. 19/15) In his victory speech the new Prime Minister elect, Justin Trudeau, said the election results showed that Canadians can “have faith in your country.”
And indeed congratulations to Canadians are very much in order. After the dour and almost paranoid reign of the Harper Conservatives many of us were starting to wonder about how widely the Canadian values we believed in were shared by our neighbours.
Tonight’s election showed that even in Saskatchewan and Alberta where vote splitting allowed Conservative victories, the vast majority of Canadians still held to the decent ideals that have characterized Canada for decades.
The major achievement of Prime Minister Harper and his cadre of fundamentalists has been to frighten Canadians enough that they stampeded to the alternative they thought best able to defeat the fundamentalists of the Conservative Party.
Harper will be remembered for his administration’s very long list of destructive and negative actions. But this destruction and fear-mongering have served to remind Canadians that the vast majority of us stand for a positive, tolerant, and inclusive society.
Canadians deserve a thank you for voting for change. With a new government in power Western farmers who understand the economic value of orderly marketing are looking forward to working toward the restoration of our single-desk grain marketing system so thoughtlessly destroyed by the Conservative administration.
The restoration of our single-desk will be good for our communities and good for Canada.