Sunday, July 17, 2011

Rural Canada Relies on the Canadian Wheat Board

In the ongoing debate about the future of the Canadian Wheat Board (CWB), one of the arguments for dismantling it is to allow farmers to find their own markets and presumably a better price for their wheat and barley.
On the surface, independence seems a good thing. However, it brings to mind an analogy: many if not most Canadians own at least some mutual funds, usually in their RRSPs. One could study and become an expert on investing and do the buying and selling that mutual fund managers do on our behalf, but we do have other ways, some useful, to spend our time. So we pay a fee, hopefully a reasonable one, to a mutual fund to do that work for us.
Yes, wheat farmers could track the price of wheat daily and sell their crop to a grain company at just the right time for a really good price.
However, unless they run a really large operation, the larger number, prefer to stick to farming and leave the grain trading to the paid staff at the CWB. The CWB offers a number of advantages to wheat farmers. First is price pooling which protects from abrupt price shifts so that farmers don't have to deliver their wheat exactly when the price peaks.
If the single desk goes, so will the producer car loading sites. Producer cars mean farmers can bypass grain companies' elevators and save themselves $1,200 per hopper car. The producer cars use branchlines and shortline railroads - what will happen to them and the communities along them?
As economist Murray Fulton said, "The . . . loss of the CWB's single-desk . . . would make the Canadian system . . . more like that in the (U.S.) . . . Grain company and railroad competition would fall, . . . the current freight revenue cap would disappear, and less value would be returned to farmers . . . These changes . . . are irreversible."
We can imagine a modern feudal system with farmers at the mercy of multinational corporations who'll decide what to grow and how much to grow.
Farms will have to grow bigger; there'll be fewer small- and medium-farming operations and the loss of small, rural communities with their schools, hospitals, community centres and other services. One could drive through rural Canada and find virtually no inhabitants.
Do Harper and company and their corporate friends care about rural Canada? It seems not.
Mark Sandilands
Lethbridge
Published in the Lethbridge Herald, Sunday, July 17th.  http://www.lethbridgeherald.com/letters-to-the-editor/rural-canada-relieson-cwb-71711.html