Shortest day of the year

by on Dec 21, 2016 in Blog | Comments Off on Shortest day of the year

Academics pray for higher prices – not exactly as illustrated

Academics pray for higher prices – not exactly as illustrated

(December 21, 2016)  Today is the shortest day of the year and as is traditional on the winter solstice farmers will be looking forward to longer days and spring planting.  Most will celebrate the season with family and friends.

Unlike the sun which we can expect to stop hovering close to the horizon, the port price of wheat has been stubbornly flat for most of the season according to Ag Canada’s weekly survey of port prices for various grains.

So on this shortest day of the year a typical prairie farmer can expect to take home $23,902.97 or a little over $7 dollars a bushel after deductions for a typical producer car of #1 wheat.  Taking off the cost of inland elevation and cleaning, the farmer ought to be getting $6.50 a bushel at a minimum.*

So how is it that most farmers are only getting a meager $5 or so for their wheat?  In spite of misleading prognostications by some compliant academics, we know the missing $1.50 (about five thousand dollars a grain car) is being taken by the private grain trade – money the single desk Canadian Wheat Board faithfully returned to farmers that is now going to foreign shareholders.

At solstice celebrations throughout history there have been elaborate ceremonies, feasts, and bonfires to encourage the sun to come back.  This year a similar ritual has been repeatedly performed as academics and others make pronouncements on how grain prices will come back if a bonfire of farmers’ money is lit to placate the gods of grain handling and transportation.

Tomorrow I will look at why prairie farmers might be better served by the return of a single desk wheat board, rather than placing their faith in foreign corporations building more grain handling capacity to bring back grain prices.

* For those wondering, the actual numbers for a producer car from Alberta were:

#1 CWRS 13.5% protein
cumulative average
price FOB Vancouver:               $309.29 (Ag Can indicator price – 16 Dec 2016)
Rail Freight:                                  $33.50
Terminal Cleaning:                         $6.81
Other fees and dedications:         $11.95

NET:  $257.03 ($7.03/bushel)



Railways want farmers to put the free in their enterprise – again

by on Nov 26, 2016 in Blog | Comments Off on Railways want farmers to put the free in their enterprise – again

(November 26, 2016)  The latest news is the railways want somebody, anybody, to give them new grain hopper cars.  Prairie farmers with unimpaired memories may be forgiven for having a sense of been there, done that.

In recent days Cargill has been touring some western farmers around its Vancouver terminal.  They’ve been fed a steady drip of anxiety about how old the hopper car fleet is and how they should really ask themselves who should pay for new ones.Elevator and grain cars

If this sounds like the same scam pulled for the Crowsnest Pass Freight Rate some thirty years ago, the reader would be correct.  Back then the railways were complaining they could not afford to replace aging grain cars so the Crow had to go.  Readers may remember that killing the Crow not only resulted in farmers paying higher freight rates but the farmer-owned Wheat Pools being forced to abandon over 80% of their elevators.  Even with all that, the railways still complained they could not afford to upgrade the grain cars, bamboozling Ottawa, the Prairie Provinces, and ultimately even the Wheat Board into buying them shiny new grain hopper cars.

Fast forward to the present and once again the railways are complaining about grain cars falling apart and being in desperate need of replacement.  Remember these are publically owned grain cars with operating agreements that say the railways are responsible for maintaining and replacing them.  But the railways don’t want to do that.  Since the Crow is dead, they’ve switched the “poor me” song from the Crow to the Maximum Revenue Entitlement (MRE), sometimes known as the “rail revenue cap.”  But the message is the same: they can’t afford to invest in new rail cars for hauling grain.  In fact the MRE provides a generous return on any investments, including new cars, the railways make.

But hey, it seems they’re trying to scare farmers and a new transportation minister in Ottawa into giving them a new fleet of cars.  But before that happens wait for the usual compliant academics to crawl out of the woodwork to pontificate on how doing away with the MRE, which protects farmers, will really be good for farmers.  Who knew farmers didn’t need any protection?  Now I’m waiting for the Western Canadian Wheat Growers Association, who did such a good job of cheerleading for the railways the last time, to come out swinging against the MRE.  After all, like the spoiled teenager who demands a new car from daddy when he wrecks the old one, the railways feel entitled.

This proves again the old scams are the best.  If farmers don’t understand the MRE  formula they will play into the railways’ hands, by agreeing the formula needs to be adjusted so the railways can afford new cars.

Remember during the Crow debate most farm leaders understood the context and did not take the railways at their word. We can only hope these current ones have the same healthy skepticism.  Based on the US experience with railway deregulation, some economists have estimated prairie farmers could well see their  grain freight rates increase 50%.  History looks set to repeat itself if farmers and the Minister of Transport aren’t careful.

PM acts on bad advice about canola

by on Sep 5, 2016 in Blog | Comments Off on PM acts on bad advice about canola

(September 5, 2016)  How would you feel if you bought a thousand grams of rice to feed your family and found 25 grams of the bag made up of weed seeds, stems and chaff?  What if you complained to the retailer and the leader of China flew in to say your demand for a clean product to feed your family could wait for further discussion?  What if the retailer told you that you were scientifically ignorant and that was that?

Most reasonable people would be astounded and offended.  Yet this is exactly what has happened on the issue of canola sales during the Prime Minister’s visit to China.

It has long been an open secret that when a grain ship is loaded with canola the companies doing so will normally add weed seeds, stems, and pods to make the 2.5% “dockage” limit specified by the Canadian Grain Commission.

This is a rip-off of both prairie grain farmers and the customers buying Canadian sourced canola from the oligarchy running the international grain trade.  Here is why:

Before Harper and Ritz fired the Canadian Grain Commission’s impartial government inspectors their inspections found the vast majority of all the grain rail cars, including canola, came in with less than 2% weed seeds and other foreign material aka “dockage.”  In a survey carried out for a manual on how to ship a producer car, it was found that one in ten rail cars graded at zero percent dockage.

Reflecting the fact the now dead farmer-controlled Canadian Wheat Board serviced the high-end niche market for human consumption wheat, durum, and barley, the export standard for CWRS wheat is still 0.4% (four tenths of one percent) for foreign material that can be removed, and 0.3% in malt barley.

At almost seven times more, the canola standard of 2.5% foreign material is a huge difference.  How the Grain Commission came to allow this incredibly sloppy export standard in canola is one for the historians but the fact is that now it is a problem because Chinese customers don’t want that level.

It is also a problem for prairie farmers on two levels.  Many farmers harvesting canola report that if everything goes well, they regularly have their canola come straight from the combine at a mere one percent dockage.  Yet farmers have their grain cheques lowered for cleaning their crop to an export standard two and a half times worse!  We also know from impartial Canadian Grain Commission “inward inspections” – unfortunately discontinued by the Harper administration – most rail cars come in at 2% dockage or less.

This shows farmers are not really being charged for cleaning, unless you consider adding weed seeds, chaff, stems, and pods to canola as “cleaning.”  This is an issue the Canola Council of Canada and the Provincial Canola Growers Associations have been conspicuously silent on in spite of taking millions of dollars from canola farmers each year to advocate for them.

customer assistanceBut it gets worse:  those foreign materials in Canadian canola carry microscopic plant pathogens and fungal spoors that create costly problems for prairie canola farmers – problems which the Chinese do not have and do not want to import.  Yet when the Chinese announced they would be asking for Canadian canola shipments to meet a standard of one percent dockage, they heard insulting nonsense from industry captured groups like the Canola Council of Canada saying Chinese concerns were not “science based.” Setting aside the very reasonable concerns the Chinese have about plant disease, I wonder what part of the “customer is always right” the Canola Council does not understand?

Of course the private trade likes things as they are.  They charge prairie farmers for doing cleaning that really amounts to adding junk to grain shipments and they charge foreign buyers for the same junk added to their purchases. 

On a typical 60,000 metric tonne grain ship, that dockage would amount to almost 1,500 tonnes of junk.  That is equal to the weight of 384 basic four-wheel drive trucks.

By in large prairie farmers already deliver a canola crop meeting the higher Chinese standard.  So it is the foreign grain oligarchy that owns and controls prairie grain from the farm gate to the end-use customer dragging their heels on this standard.  The Chinese have allowed Prime Minister Trudeau to save face by delaying imposing this long overdue higher cleanliness standard.

This is not the first time the Prime Minster, and his Trade Minister Chrystia Freeland have received very bad advice from the leftovers of the Harper administration still infesting Agriculture and Agri-Food Canada not to mention industry captured agricultural check-off Commissions.

In the end, the grain oligarchs have very little to lose since they can source canola from anywhere and re-sell it to China.  Prairie farmers can only hope that China continues to buy 40% of their export* canola crop and does not change its purchase tenders from “Canadian source” to “source optional” in the future.  After being bullied and insulted, who could blame them if they did?

* Note: the word “export” was omitted from an earlier version of this post.

China accepts canola – for now

by on Aug 31, 2016 in Blog | 2 comments

(August 31, 2016) Canadian farmers who supply private trade canola exporters with raw product are breathing a bit easier today because Prime Minister Trudeau was able to leverage his and Canada’s long standing relationship with China to delay the imposition of higher cleanliness standards for canola imported into China.  Given the problems of diseases in canola, including club root, Chinese concerns are certainly understandable.

China has a culture which is centuries deeper than anything in the west.  So it is no surprise personal and institutional relationships carry a great deal of weight.

That relationship between China and Canada was greatly enhanced almost 60 years ago.  In 1958 the Canadian Wheat Board defied the American food embargo of Red China and started to sell wheat to the starving, beleaguered, and war torn country.  In 1961 a further three year agreement was signed, something the Chinese never forgot.

40 Anniversary of Canada-China Wheat Trade

40 Anniversary of Canada-China Wheat Trade

In the year 2000 the Chinese government food agency COFU presented a heartfelt gift to the CWB commemorating the 40th anniversary of the relationship.  The gift apparently disappeared along with the Wheat Board library and archives vandalized by the Harper government.

The Wheat Board always exported wheat and barley based on honesty and the highest cleanliness standards in the world.  Canola has always been exported by the private trade which, to be polite, has a mixed reputation on both counts.

It’s a good thing the Prime Minister was able to negotiate a reprieve.  However trading on a personal relationship and the reputation of an institution valued by the Chinese but destroyed by the Harper Conservatives is not really a sustainable option.  How soon before the private trade wrecks Canada’s reputation for supplying high quality wheat and barley, just as they have done with canola?

After all the complaints on the quality front started rolling in almost immediately after the CWB was killed.

As things stand now, farmers and the Government of Canada have no control over Canadian grain since it is now owned by the private trade from the farm gate onward.

Even worse the Harper Conservatives’ massive omnibus budget in 2012 eliminated the Canadian Grain Commission inspectors who did “inward inspection” of grain cars arriving at port terminals crippling the only other impartial institutional over sight of grain exports.

If Canadian farmers are to continue to benefit from producing high quality grain then Ottawa must rescue our niche in the international grain market by reversing the mistakes of the Harper era like killing the farmer-controlled Wheat Board and crippling the Canadian Grain Commission.

Given the wreck in the canola market and looming problems in the other cereals and oil seeds markets, a Canadian Grains Board would be an even better idea to make our agricultural industry run smoothly and assure our customers they are getting quality assured product.

Saskatchewan government peddling fairy dust – again

by on Aug 11, 2016 in Blog | Comments Off on Saskatchewan government peddling fairy dust – again

Saskatchewan Agriculture Minister leads sing-along with private trade May not be exactly as illustrated

Sask. Ag. Minister leads sing-along with private trade
May not be exactly as illustrated

(August 11, 2016) With prospects of another bumper crop, the Saskatchewan government is laying the groundwork for a “blame the railways narrative” with its recent news release titled “Joint Efforts Ensure Grain Transportation System Is Prepared to Move Harvest.”

The Saskatchewan Government is pretending that setting up talking shops with no regulatory power will somehow move the giant grain handling companies to give up their profits for the benefit of farmers.  The unbalanced approach of the Sask. government can be seen in their willingness to interfere in the collective bargaining rights of port workers while turning a blind eye to the defective market structure which allows the grain handling companies to arbitrarily choose how much they will pay farmers for their grain.

After the marketing debacle of 2013-14 the Harper Conservatives attempted to cover up the consequences of killing the logistical influence of the farmer-owned and controlled Canadian Wheat Board on grain marketing by painting the railways as the scapegoats for the mess.  In fact it was the private grain handling companies that were taking excess profits from farmers during the bumper crop year of 2013-14 and blaming the railways.

However the Canadian Transportation Agency’s December 2014 determination of the Maximum Revenue Entitlement (MRE) – commonly known as the “rail cap”-, showed that narrative was false.  In fact that bumper crop was moved very efficiently.  The CTA reported that rail movement increased almost 19% that crop year in response to a crop about 25% above the previous year (see:  Agriculture and Agri-Food Canada, July 22, 2014 Outlook for Principal Field Crops).

The Agi-Food report also noted “low carry in stocks” which is a nice way of saying that 6% difference between production and rail grain hauling increases filled a grain pipeline that had been emptied as a result of the US drought the previous year.

Without the single-desk Wheat Board farmers are no longer shippers and it was the grain handling companies, not the railways, who increased their basis charges to cover up their excess profits taken at the expense of farmers. It was the grain companies who were having trouble meeting customer needs through effective management of grain delivery to their port facilities.  CWBA noted in November of 2013 that “Competition creates chaos at ports.

Given current predictions, we can expect a repeat of that this coming crop year. And for much the same reasons, as was said here.

The railways are constrained by the MRE from over charging grain shippers for transportation.  However, the grain shippers are now almost exclusively the private grain trade and usually they own both the inland elevators and port terminals.  Due to the distances between inland elevators they are not effectively constrained from taking excess profits from farmers who are captive to them.  A bumper crop and the associated propaganda from the Sask. government and the trade will not change this fact.

CompetitionThe government of Saskatchewan’s calls for greater transparency simply mask the fact the private grain trade is under no obligation to disclose port prices or the prices they are taking from customers around the world in any sort of timely fashion that would benefit prairie producers.  Given the imbalance of market power between farmers and grain companies such transparency would make little difference at the farm gate in any event.   Nor will it change the fact that without their single-desk Wheat Board farmers will once again watch world prices being diverted into the hands of the grain trade who now own the grain from the time it leaves the farmers’ trucks at the inland elevators.

With yet another bumper crop in the offing, once again the ground is being laid to divert attention from the grain companies using their new found status as both the owners and shippers of wheat and barley for export to take more profits out of the system by using their market power to short change farmers.

How long does Thunder Bay have?

by on Aug 3, 2016 in Blog | Comments Off on How long does Thunder Bay have?

export ship close up

Dock worker & export ship

(August 3, 2016) Last week’s effective closure of the port of Churchill as a grain shipping port and likely a rail-based adventure tourist destination marks another sad milestone in the transformation of the western grain economy.  In spite of assurances from the Western Grain Elevators Association (WGEA) that they have lots of handling capacity at Thunder Bay to offset the loss of Churchill; the closure darkens the future of Thunder Bay as well.

The WGEA say they represent companies handling “in excess of 90% of western Canada’s bulk grain exports.”  But if you cut through the corporate jungle, aside from a handful of comparatively tiny Canadian companies their membership is really the foreign giants of the ABCD group that effectively run the rest of the world’s grain trade.  By claiming that the real issue is handling capacity the WGEA is diverting attention away from both the killing of the Wheat Board being the primary cause of the closing of Churchill and the fact Churchill was a smaller competitor.

Big Grain

ABCD Group – click to enlarge

Of course it is true WGEA’s members have lots of handling capacity elsewhere and are building more.  However it is also true that for those farmers in the Churchill catchment area the WGEA facilities cost more to use.  Their next nearest port is Thunder Bay.

In light of the Western Grain Elevators Association assurances, it is fair to ask how long it will be before Thunder Bay suffers the same fate as the port of Churchill? 

Like the OmniTrax terminal at Churchill, the Mission terminal at Thunder Bay is not really owned by the largest ABCD group members.  Glencore’s Viterra terminal and the two Richardson terminals at Thunder Bay are also small players compared to the west coast ports or even the deep water ports along the St. Lawrence river.

So how soon will it be before the big players of the ABCD group choose to bypass another small competitor?  After all closing just one or two of the larger Thunder Bay terminals would go a long way to making the remaining facilities too small to carry the costs of moving grain through the St. Lawrence Seaway system.

For the larger players with terminals on the St. Lawrence River at Baie Comeau, Port Cartier, and Quebec City, sending whatever grain is needed for the Atlantic market via rail to these deep water ports on the St. Lawrence River must be a tempting option especially since they can lower their fixed overhead costs by abandoning Thunder Bay and any extra operating costs will be paid by farmers.

The process of abandoning Canada’s long standing quality-assured grain export system with its focus on high-end niche markets around the world is pretty much complete.  It started with the 2011 killing of the Canadian Wheat Board which ended the democratic influence of farmers on this system.  Without the single-desk Wheat Board, the formerly Canadian controlled system is largely controlled by the same four giant companies (known as the “ABCD” group) that run the rest of the world’s grain production.

As was said here, the port of Churchill was all about providing value to the farmers in its catchment area of eastern Saskatchewan and Manitoba.  However, without the Wheat Board, the system is absolutely not about producing value for farmers.  Now the system is about profits for the ABCD group.

What’s clear is that the closing of Churchill is one of the many shoes that have dropped since Harper and company killed the Wheat Board and there are more to come.  It would be no surprise if Thunder Bay was next.

Churchill tweets raise more questions

by on Aug 1, 2016 in Blog | 1 comment

Minister Ritz with corpse of Wheat Board may not be not exactly as illustrated

Minister Ritz with corpse of Wheat Board
may not be exactly as illustrated

(August 1, 2016)  When it comes to the announced abandonment of the port of Churchill former Harper Agriculture Minister Gerry Ritz is manfully tweeting and twittering in an effort to create doubt and divert attention from the corpse of the Wheat Board hanging around his neck.  He does this whenever another wreck happens as a direct consequence of killing the farmer-owned and operated Canadian Wheat Board.

Churchill, Manitoba, is Canada’s most northern sea port.  The rail line servicing it is a life line to the remote communities on its route and the port itself has great strategic value for Canada’s northern sovereignty.  This is particularly true in an era of global warming where the Arctic Ocean may well become this century’s Mediterranean Sea – a common ocean bordered by different nations and traversed by ships from many others.

Lately, the former Agriculture Minister with the help of his followers has been tweeting away at great lengths about the poor state of the Churchill rail link, its low speed, and the limited storage capacity of the grain terminal.

These are mostly red herrings.  When the Wheat Board was marketing grain it filled the terminal over the winter so the speed on the rail line was not such a big issue.  Since the port is only ice free for a short period its storage capacity, which is the other excuse the former Minister and his supporters are trotting out, does not make much difference to the amount of grain that can be run through the port.  But hey, when you’re trying to avoid taking responsibility for the consequences of your actions, any diversion will do.

But these excuses raise some interesting questions.  For example, the former Minister says Ottawa offered the owners of the Churchill rail line matching dollars for upgrades.  Yet this is something successive Conservative Agriculture and Transportation Ministers let slide during the ten years of their tenure.  In a tweet the former Ag Minister gave a ball park estimate of the cost of line upgrades at $200 million.

So why would a profit-oriented private company leave $100 million in free money sitting on the table, especially in an era of near zero interest rates?  And why would the Harper Conservatives let it all slide?

There are two obvious explanations which come to mind why OmniTrax management apparently left all that money on the table.  One would be that neither the rail line nor the terminal capacity was causing significant problems when the Wheat Board was sending grain through Churchill to premium Atlantic markets – so there was no compelling reason to upgrade.  The other could be that OmniTrax’s management no doubt understood that without the Wheat Board they had almost zero chance of their terminal being used by the giants of the international grain trade for servicing the international grain market.

Big Grain

Big Grain – click to enlarge graphic

Much to the annoyance of the international grain trade, the farmer-controlled Wheat Board was ruthless about choosing the port that would yield the best returns for farmers.  Unlike all the other players in the international grain trade, the Wheat Board was only interested in getting prairie farmers the maximum value for their crop and within its limits Churchill filled the bill.

Either way, it looks like OmniTrax management made a good call since up till now we know the members of the international grain trade have chosen to go for the low hanging fruit of expanding their existing facilities and further narrowing the shipping options open to prairie farmers.

After all once Churchill is gone, the alternative routes for grain from Manitoba and Eastern Saskatchewan are through the trade’s facilities at Thunder Bay and down the St. Lawrence Seaway or directly by rail to their existing deep water terminals along the St. Lawrence River – or perhaps south into their US facilities.  All the routes are more expensive for prairie farmers who end up paying the costs.  However, those farmer-paid costs are just more profits for the giants Gerry Ritz gave marketing freedom to.


Churchill was about value for farmers

by on Jul 28, 2016 in Blog | 2 comments

Port of Churchill - supplied photo

Port of Churchill – supplied photo

(July 28, 2016) It is never well received to say “we told you so” but the people of the Churchill, Manitoba region, this organization, and many others have long warned that killing the farmer-controlled, single-desk Canadian Wheat Board (CWB) would spell the end of the Port of Churchill and much else.

Some 95% of the grain going through Churchill was directed there by the single-desk CWB because Churchill provided significant value to wheat farmers in eastern Saskatchewan and western Manitoba for servicing Atlantic markets.

For those prairie farmers part of that significant value was reduced freight costs estimated in the range of $10 to $25 per tonne compared to the alternative route through the St. Lawrence system.  Another part of that extra value came from premiums paid by customers which were returned to farmers through the Wheat Board.

Those higher values for farmers gave the CWB an incentive to fill the port of Churchill with grain over the winter at a very modest storage cost while running trains over the frozen rail bed thereby extending the life of the rail line itself.

There was enough extra value produced by Churchill that the CWB paid farmers for storing grain on their farms until the time when rail cars could be moved to Churchill in anticipation of its relatively short ice-free season – and with global warming that ice-free season may be longer in the future.

Churchill relied on a marketing system that was oriented towards returning maximum value to farmers and with the end of the single-desk Wheat Board that system was destroyed.  In its place is a system owned and operated by four giant companies and one or two comparatively trivial-sized Canadian grain handlers.

None of those companies own the Churchill grain terminal and they have no doubt calculated that doing so makes no sense for them when they are building new handling facilities and already have surplus capacity at Vancouver, Prince Rupert, Thunder Bay, and along the St Lawrence River.  There is no incentive for them to move grain through Churchill when they own their own facilities at other ports.

In contrast the Wheat Board never suffered from such a conflict of interest when it came to choosing among port facilities and so Churchill prospered because it offered value to farmers.  Without the CWB, farmers are cut off from the world market just as the Port of Churchill is now cut off from export grain shipping.

Harper’s Agriculture Minister and the bureaucrats they put in place at Agriculture and Agri-Food Canada were shrewd enough to understand Churchill needed the single-desk so they put a $10 million subsidy in place to keep Churchill alive until after the last Federal Election.  Perhaps they hoped people would not notice.

However, the voters of the Churchill basin saw though this shoddy and expensive bit of trickery and defeated a determined challenge by the Conservatives to take the seat from the NDP.

Canadians also saw though the destructive Harper Conservatives and threw them out of office in the last election.  However it would appear the affable Liberal Agriculture Minister has yet to clean out the bureaucrats in his department who helped visit this entirely avoidable calamity on the workers in Churchill who depended on Wheat Board grain shipments and the farmers of western Canada.CWB Polar Bear

Canada is losing an ocean port of strategic value to the nation and whose economic value to prairie farmers and port workers was destroyed by the Harper Conservatives when they killed the single-desk Wheat Board.

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.