This just in from the Reuters news agency out of Hamburg, Germany: Canadian wheat is now the cheapest in the world. How times change! With the single-desk Canadian Wheat Board farmers sold directly to overseas markets and got premium prices because of reliability of supply, honesty, and guaranteeing the highest quality grain in the world.
Thanks to Ottawa that is all gone now and Canadian sourced wheat is being sold into the Middle East for less than even wheat from nearby Russia.
This comes as no surprise to western farmers, the majority of who supported keeping the farmer-controlled single-desk.
In a related story, three weeks ago an Alberta farmer with durum wheat to sell went to his local foreign-owned elevator and was offered a mere seven dollars and change per bushel. Quite a letdown from prices that were usually more than double that with the farmer-run Wheat Board.
When he said he would wait, the elevator operator said they also had US pricing for durum which would give him twelve dollars a bushel. Not near the Wheat Board pool prices for durum but better.
Of course we know that for the first time in memory durum wheat prices are now higher in the US than in Canada and have been since Minister Ritz announced he was killing the Wheat Board.
For those who were paying attention, we have a very objective source on durum prices. Some years ago the International Trade Commission conducted an inquiry to see if the farmer-controlled Wheat Board was dumping durum wheat into the US.
The inquiry was conducted under international law like a court case. The Wheat Board sales staff were put under oath and cross examined. CWB and private trade sales in the US and from the CWB were subpoenaed and compared along with cross examination by lawyers and experts that cost almost as much per hour as a new combine.
The conclusion by the International Trade Commission was that in the five years of sales they examined the single-desk Wheat Board got premium prices for durum wheat compared to US prices in 59 out of 60 months. In the following years these findings were confirmed by three other similar tribunals.
Thanks to Minister Ritz and his tiny group of core supporters, Canadian hard red spring wheat delivered into the Middle East is now the cheapest in the world. Of course it is not really Canadian wheat any more. Ownership now changes hands to foreign corporations as soon as the Canadian farmer dumps it at the elevator – the companies get the profits by giving farmers lower prices. Thanks Minister Ritz!
One of the benefits of being involved with the Canadian Wheat Board Alliance and the Friends of the Canadian Wheat Board is that I get to talk with a lot of knowledgeable people and I also get to hear very interesting reports from all over the prairies.
Here is one from a very reliable friend in southern Alberta. While waiting in a long line up of trucks at a southern Alberta elevator my friend found himself behind a vocal and well known anti-Wheat Board farmer. So my friend asked the guy why he was sitting in a line up in Alberta – why wasn’t he hauling to the US.
The fellow answered that he had done so the previous week. He said he had found a good price for durum wheat in Great Falls, Montana on the internet so he had loaded up his truck and headed south.
“So how did that work for you?” my friend asked.
“Not worth a damn” was the answer.
Apparently he had spent three hours at the border doing paper work which the Yanks did not have readily available. “Then as soon as I got into Montana, the highway patrol pulled me over – I had to remove the marked fuel from my truck and replace it with clear fuel and that took another three hours.”
When the farmer finally got to an unnamed Great Falls elevator they discounted his durum because it was two-tenths of one percent wetter than they wanted. Then they found a small rock in the load and discounted the price even more.
So my friend tells me the farmer said it was not worth it and he will be sitting in lines in Canada for the foreseeable future.
All of which demonstrates that in the world grain trade the whole idea of “buyer beware” is turned on its head and it is “seller beware” because the real power now rests with the grain companies. So this farmer learned a hard and costly lesson. The advertised price is just to get you in the door and then the excuses start. In the end he dumped his load of ultra-high quality durum wheat for less than it was worth while spending a lot of money and a very frustrating day down south.
This September the US Department of Agriculture announced it had found unapproved genetically modified (GM) wheat growing in Montana. This new discovery follows a similar discovery in Oregon in 2013 which disrupted US wheat export shipments for a time.
These US cases raise red flags for Canadian farmers because the discovery of the glyphosate (trade named “Roundup”) tolerant GM wheat in 2014 was at the Montana State University research center in Huntley almost ten years after GM wheat field trials were conducted there between 2000-2003.
Some Canadian farmers may also remember how a GM flax variety (CDC Triffid) which had only been field tested in Saskatchewan and was deregistered in 2001, showed up eight years later in a flax shipment to Germany ending our access to the European flax food market in 2009. Even today flax growers are still paying for extra testing and pedigreed seed in an attempt to fully open what was once a very profitable market for Canadian growers and processors.
As with flax, the Canadian Food Inspection Agency has allowed field trials of glyphosate tolerant genetically modified wheat in several places on the prairies but has kept those locations a secret from the public. The news that genetically modified wheat can show up to contaminate grain shipments years after the trials have been suspended, as has apparently happened in the United States, raises serious questions about the quality assurance now available to purchasers of Canadian wheat since GM field trials were approved.
Unlike flax, where the losses were in the millions, GM contamination in Canadian wheat would mean losses measured in the multi-billions of dollars to farmers and the western economy.
And unlike when GM flax showed up, Canada’s impartial inward inspection of grain coming into export terminals by Canadian Grain Commission inspectors has either been eliminated entirely or privatized by Ottawa. The Canadian Food Inspection Agency has been essentially gutted, and with the farmer-controlled single-desk Canadian Wheat Board gone, it is a fair question to ask “who is minding the store?”
The reappearance of GM wheat matters because the customer is always right, as the grain giant Cargill found out when a shipment of its corn was rejected because of contamination by a genetically modified variety. Almost all the giant international purchasers of wheat and other grains are unanimous that they will not buy genetically modified wheat and other grains because their consumers do not want it.
If wheat farmers and those who eat bread and other wheat products don’t want a repeat of the flax debacle, they need to get after their MP now to end GM wheat testing and destroy all seed before it is too late.
More information on our Resources page under Public Plant Breeding
With all the fuss over the private grain trade using their new-found position as middlemen between farmers and international customers to take over two billion dollars in extra profits just on wheat in the last crop year, the shenanigans surrounding Ritz’s crippled Wheat Board have been largely overlooked.
This spring for the first time in 79 years the CWB failed to make their annual audited statement of operations public. The law requires the CWB to supply the Minister Responsible for the CWB with an audited statement by the end of the first quarter of each year. One can imagine that had the farmer-elected Directors behaved this way the cries of outrage from the Minister and his cheering section of astro-turf groups could have been heard all the way to Tasmania.
Yet the Minister’s office has done everything it can to prevent farmers from seeing this crucial document and is trying to off-load the responsibility by claiming it is the CWB who considers the audit confidential – never mind the fact the legislation is clear it is the Minister who has ultimate authority over the Crippled Wheat Board.
Finally under pressure from the Friends of the Wheat Board, media, and MP inquiries the Minister’s office released an audited statement but with the numbers on grain handlings, sales, and expenses removed. It is worth noting the only significant number in the partial audit released to the public is an acknowledgement that the Friends Class Action Law Suit constitutes a potential liability of $17 billion dollars.
Meanwhile Ritz’s CWB has been spending on inland grain handling facilities, even starting to pour concrete for a new terminal in Manitoba.
For farmers whose hundreds of millions of dollars in cash as well as the value of both hard assets like rail cars, ships, the downtown Winnipeg office building, and the billions of value in the CWB brand are at stake, the withholding of the audited statement seems ominous.
Canadian taxpayers should also have concerns. They are the ones providing financial guarantees to Minister Ritz’s Crippled Wheat Board. Minister Ritz has also allocated $350 million dollars of taxpayer money to his Wheat Board some of which showed up in last year’s audit for transition costs, but the rest is unaccounted for. Many suspect that part of the reason for the cash infusion was to provide political cover for the Harper government who promised a “strong and viable” voluntary CWB.
As many critics of killing the single-desk farmer-controlled Wheat Board pointed out, a strong and viable voluntary Wheat Board really meant creating a new grain handling system to compete with the already well established multinational giants. Creating that new grain handling system will cost billions of dollars with an uncertain outcome at best.
The fact Minister Ritz has chosen to keep the audit with real numbers for his Crippled Wheat Board a secret makes this writer suspect that there is much more to this story than Minister Ritz and his Prime Minister want revealed.
After the partial privatization of the legendary 113 year old Indian Head Tree Farm run by Agriculture Canada (rebranded as the Agro-forestry Development Centre some years ago) scientists, staff, and the Reeve of the Rural Municipality of Indian Head raised the alarm earlier this summer that the new private sector operator had allowed thousands of tree seedlings to be overtaken by weeds. As anyone who has planted a perennial garden or miles of shelterbelts knows, once weeds get established the work of years can be undone in a season.
This moved the Public Service Alliance of Canada (PSAC) to issue an anguished news release on the subject. A few days later they withdrew their new release’s contentious characterization of the privatized working conditions at the Indian Head Research Station tree nursery among the volunteer staff. It is notable nobody has withdrawn observations on the poor stewardship of the Tree Farm under privatization. After all why should they? The weeds choking thousands of tree seedlings speak for themselves.
No doubt the passion of the PSAC workers comes from a deep sense of the importance of the Tree Nursery and its place in western Canada. Canadian historian James Gray wrote Men Against The Desert about that heroic struggle to preserve and enhance the ecology of the dry prairies through the planting of shelter belts.
When you drive anywhere in the rural west you can see evidence of that heroism and selflessness in the shelterbelts which are still so common. Remember the farmers who spent years of hot summers watering those little sticks and keeping them weed free so they could grow to maturity had no expectation of benefitting from those plantings. They were doing so for the benefit of the next and future generations.
The staff at the tree farm was part of that bigger project – a project bigger than any individual lifetime and a project which recognized the obligation of one generation to the next.
So to see generations of work compromised by the invincible irrationality of the Federal Agriculture Minister’s pogrom against those values makes this farmer seethe, so I can only guess at the restraint shown by the PSAC people and I can sympathize with their concerns.
Urban people have almost no conception of the extent of the vandalism of basic agricultural resources, like tree farms and research stations, not to mention the privatization of the wheat genome now almost completed by the Federal Agriculture Minister.
To see the work of generations destroyed by the group of zealots now occupying Ottawa demonstrates the fragility of the Canadian state and its unwillingness to do what those heroic prairie farmers and the government workers who supplied generations of shelterbelt trees did so well – look to the future.
but farmers still captive
On the face of it the recent Supreme Court of Canada ruling that shippers have the right to appeal to the Canadian Transportation Agency (CTA) on things like fuel surcharges imposed by railways on existing contracts might seem like good news for farmers.
An Ottawa based transportation lawyer is quoted as saying the decision upholds the 2008 Canada Transportation Act which was intended “to rebalance the legislative framework in favour of shippers”
While Vancouver lawyer Forrest Hume, the legal advisor for the Canadian Freight Management Association (FMA) the industry group which supported the case launched by Peace River Coal, is quoted in an FMA news release saying “From this point forward, all shippers that have a complaint about the growing list of incidental and supplementary charges imposed by the railways will know that they have recourse to complain to the regulator whether or not there is a confidential contract in effect.”
In its decision the Supreme Court observed “…rail services were and are not provided in a perfectly competitive marketplace. In certain circumstances, the railways were seen to have superior market power to shippers.”
So it was a good ruling for coal companies, grain handling companies, and other shippers dependent on rail service. However, this does not change the fact that farmers are not shippers under the Act or the fact few farmers or their organizations have the deep pockets necessary to undertake such an appeal on the off-chance they are a shipper.
Those few farmers who are still besotted with the private grain trade and their Astroturf organizations, from which many of them enjoy off-farm income, will no doubt argue this ruling will create more of the magical competition which is supposed to make everyone better off.
In the real world of farming, most grain farmers are captive to one or two of the handful of grain handling companies and those companies’ facilities are largely captive to one or the other of the railways. In the event members of the Western Grain Elevators Association actually manage to lower their rail costs, it is a safe bet they will not be passing those savings on to farmers in the form of higher grain prices.
In 1996/97 the single-desk CWB successfully fought to establish they were a shipper of grain under the Transportation Act and used that ruling to win a level of service complaint against the railways and later civil judgements which put tens of millions of dollars back into farmers’ pockets. Thanks to Minister Ritz killing the single-desk, farmers no longer have the market power or the legal right the single-desk Canadian Wheat Board gave them to play in that elevated league.
It is also worth remembering that rail costs are now a smaller part of the overall cost farmers pay to move their grain to market. Thanks to the end of the single-desk farmer-controlled Canadian Wheat Board the private grain trade now has superior market power to farmers. This allows it to make greater profits, easily making grain handling the biggest cost to farmers.
Before the end of the CWB, the grain handlers were regulated service providers like the railways still are, and were restricted by law as to how much money they could charge the farmer-controlled CWB. Effectively farmers owned grain marketed by the CWB from their farm to the end use customer. Now it is the grain handlers that own the grain from the time the farmer dumps it at the elevator, and the handlers are free to make as much money as they want from that grain and pay the farmers however little they can get away with.
The Supreme Court decision benefiting shippers does not change the fact western farmers are now captive suppliers with no market power and are receiving less than half of the world price they got with the CWB.
“The Canadian Wheat Board is dead but CWB, its government-owned, open-market successor, is still a lightning rod for controversy.” – Manitoba Cooperator
Last week Minister Ritz was quoted in the Manitoba Cooperator claiming killing the single desk Canadian Wheat Board is having a positive impact across the prairies.
He is starting to sound like one of those dreadful 1960’s “Chatty Cathy” dolls with the string coming out between its should blades. Pull the string and it would repeat the same mindless phrases over and over.
How does taking almost 2 billion dollars of wheat sales out of farmers’ pockets in the last ten months and giving it to the private grain companies, most of whom are foreign owned, have a positive impact across the prairies?
How does having premium customers like Japan and China complaining about quality assurance and reliable supply, two areas the single desk excelled in, have any sort of positive impact?
We know from the audited statements of the now dead Canadian Wheat Board that the cost of moving wheat to port was in the range of 78 cents per bushel, and that was all in: rail, elevation, cleaning and terminal service. Over the past months the cost to farmers is now almost ten times as high – somewhere north of $6.69 per bushel. There are no Chatty Cathy talking points from Minister Ritz on where that money has gone aside from belligerence about why he will not table an audited statement for his crippled CWB.
We know the railways are constrained by law from taking any more money than they usually do, so that leaves the private grain companies with some explaining to do and blaming the railways when they were delivering grain at 98% of normal just does not cut it.
Blaming the oil companies for shipping oil by rail is always fun, but that oil largely goes south, not east or west. In 2013 there were about 140,000 rail car loads of oil shipped in Canada. That sounds like a lot until you realize that the CWB would regularly ship 240,000 cars of grain to the west coast each year, and there would be a similar number shipped by the private trade in other grains, not to mention the grain cars going east to the Lakehead, north to Churchill, and a smaller number of durum and malt barley cars going south to the US.
With the latest news that the private grain trade, which holds an oligopoly on port terminals, is not handling Minister Ritz’s CWB grain, we can say with confidence that only Chatty Cathy could repeat Minister Ritz’s mantra that “dual marketing” will work. As so many single desk supporters pointed out: without the farmer controlled single-desk Canadian Wheat Board, the only choice is the private trade.
The contest of interest now is the power play going on between the railways and the private grain trade in front of the Canadian Transportation Agency. Whoever wins that one, grain farmers can be assured they will pay more and get less – unfortunately farmers cannot take that to the bank.
Sometimes a single act or event can symbolize a whole culture. June 8th is the 66th anniversary of one of those profound acts. And this year’s announcement that the University of Saskatchewan will be closing its law library is one of those events which symbolize a different culture.
One of the displays in that law library was the rear fender from a farm tractor which symbolizes the culture that built the University of Saskatchewan. It was on June 8, 1948 Saskatchewan farmer Cecil George Harris while pinned under his overturned tractor, used his jackknife to carve his last will and testament into that fender’s paint. The fender was presented to the Court and used to establish the precedent that a handwritten will could be a valid legal instrument.
Mr. Harris was a farm person and he no doubt knew he was dying, yet his message was optimistic and his last efforts and thoughts were to protect his family’s future by writing a will. That says something about the quality of prairie farm culture and looking to the future – perhaps it is those long prairie vistas.
Since the law library where it was housed is now a victim of the same austerity mania that Ottawa uses as a cover to destroy what it either does not like or will not understand, it would not be a surprise to see this valuable artifact put in a back room or at worst, given the disrespect for academic freedom so recently on display at the University of Saskatchewan sold or sent to the recycling bin. Pretending a university can have a law faculty without a dedicated law library says much about the current culture which has come down from an Ottawa regime in full retreat from evidence-based policy.
Over the past years this organization has pointed out the systematic destruction of research capacity in grains carried out by Ottawa. As grain producers our members understand all too well what happens when research capacity is privatized. We have a vivid example this spring where seed canola which was privatized in the 1980s now costs in the order of $600 a bushel compared to seed wheat which is still funded by farmers in the public interest and costs a fraction of that astronomical number.
With the closure of the Winnipeg Cereal Research center, our capacity to continue producing the highest quality of cereal grains is being thrown to the winds by Ottawa and the giant agro-chemical companies are picking up the elite scientists who gained their expertise in farmer- and publically-funded laboratories and research farms. Ottawa wants all plant breeding to follow the canola model which aims to promote herbicide sales while coasting on the yield gains already in hand created by farmers funding science in the public interest.
Scientists, commentators, and academics from around the world have expressed dismay at the systematic destruction of scientific and academic libraries across Canada under the trusteeship of the Federal Government. One of the first acts of this pogrom against evidence was the destruction of the Canadian Wheat Board library in 2013. With last month’s sabotage of Health Canada libraries, even the general public should now realize what a serious problem this represents.
While it is all too easy to destroy libraries, research facilities, and marketing agencies, Ottawa may find that it is not so easy to destroy the cooperative values symbolized in a steel tractor fender now hidden away at the University of Saskatchewan.
Last month the Canadian Canola Growers Association (CCGA) provided western farmers with their laugh of the day when they breathlessly opined in a news release that an amendment to the so-called Fair Rail for Grain Farmers Act “could open the door to have compensation flow back to farmers from the grain companies, when railway service failure has occurred.”
At the time many thought this simple-minded observation showed that the CCGA was playing its usual role as an apologist for the grain companies – another example of an Astroturf organization with no real connection to the farm community beyond a glitzy annual general meeting in a large city hotel celebrating Board members mainly noted for their deeply conservative pedigrees and idealization of private markets no matter how defective or destructive.
However, the announcement the CCGA would be filing a level of service complaint with the Canadian Transportation Agency (CTA) demonstrates its Board are more than willing to waste farmers’ money on futile and pointless gestures to provide political cover for a Federal Agriculture Minister and the private grain companies who have stripped over five billion dollars from western farmers in less than ten months.
Did the CCGA Board of Directors notice that under the Canada Transportation Act only “shippers” which the Act defines as “a person who sends or receives goods by means of a carrier or intends to do so” may launch level of service complaints? As has been said by lawyer and independent Alberta Conservative MP Brent Rathgeber and many others, farmers are not shippers.
Perhaps for political reasons the CTA may accept the notion that the CCGA has the intention of actually shipping some canola by rail but otherwise one has to wonder at the CCGA spending farmers’ money for such a faint-hope appeal to the CTA unless its purpose in doing so is political.
If the CTA considers the complaint, farmers’ money will be spent pushing a weak argument which the railways will be happy to refute with reports from Quorum, the Independent Grain Monitor showing overall grain shipments are down only 6% and shipments to Vancouver are down only 2%. It is hard to make a credible case against the railways when the system to Vancouver is running at 98% capacity and the overall system is running at 94% capacity.
But it gets worse. The CTA could appoint a mediator in the dispute and then the CCGA would also be on the hook for half of the mediation costs, which could amount to hundreds, if not thousands of dollars per day. Chump change for the railways, but a lot to farmers who’s hard earned money the CCGA should not be wasting on political smoke screens.
Being successful at the CTA is only the first step however. To put money back into farmers’ pockets, the CCGA, like the farmer controlled Canadian Wheat Board before it, would have to sue the railways for damages. The CWB was able to show that as the shipper of all wheat and barley, it had sustained millions in damages which it was successful in getting from the railways and returning to farmers. However, the CCGA would be hard pressed to show how it sustained any damages since it is, in its own words “an association of associations.”
So it would be fair to say this effort by the Canadian Canola Growers Association is likely to only prove useful for providing political cover and some bogus legitimacy for Bill C-30, better named the Fairy Dust for Grain Farmers Act given Royal Assent yesterday (May 29/14).
Perhaps within the Ottawa bubble and amongst the most gullible of the urban based agricultural press this will be seen as a bold move that will put money back into farmers pockets, but the real question is how can a group like the CCGA, which has only the thinnest democratic mandate, use farmers’ money to provide support to a Minister who has no credibility for achieving anything beyond being supremely destructive?
There is more news on the Fairy Dust for Grain Farmers Act. Apparently a procedural matter has slowed the Senate’s rubber stamping this bit of legislative smoke and mirrors with predicable huffing and puffing from Conservative Senators desperate to be seen doing something to off-set the billions of dollars of damage they’ve already done to western grain farmers by killing the single-desk Canadian Wheat Board.
In related news the giant Louis Dreyfus Company launched a level of service complaint against CN Rail which should come as no surprise nor should the applause from the Western Grain Elevators Cartel since a successful complaint ought to increase their profits.
The critique of the Fair Rail for Grain Farmers Act (Bill C-30) made by an independent Conservative MP from Alberta was that it did nothing for farmers since farmers are not legally considered shippers. Shippers are the ones who own the grain and farmers give up their ownership of the grain once they unload it at the elevator.
What is a surprise is the expectation by some of the farmers who supported killing the Wheat Board that the grain companies winning level of service complaints will act like the single-desk Wheat Board and increase prices to farmers.
I would not hold my breath on that one. The giant grain companies did not get that way by leaving money on the table for farmers. Their shareholders and owners can be forgiven for wondering why they should limit their legally acquired profits much less share those profits with farmers.
To use an ugly phrase, “farmers have no skin in this game” thanks to Minister Ritz killing the single-desk Wheat Board, even if they are the ones who pay for the whole thing. Agriculture Minister Gerry Ritz kept his promise that farmers would no longer be responsible for the grain once it hits the elevator pit. It is too bad some farmers and too many politicians thought that was a good thing without thinking about the money farmers would lose.
The sound and fury in the Senate about a procedural matter slowing consideration of Bill C-30 signifies nothing for farmers. Perhaps some fairy dust fell in the works.