Friday, October 29, 2010

The Debate Gets Personal

I have received a copy of a “letter to the editor” signed by Ian Robson from Deleau, MB.  It is a direct response to, and criticism of, my commentaries, and a personal attack on me.  His letter is an excellent example of how the guardians of the CWB – those that argue aggressively against any negative comments about the CWB, even those substantiated with facts – use rhetoric, fear and even personal attacks to change the channel or divert attention away from the real issues.

His letter follows my comments.

First, I make no apologies for my comments or my position.  I am a fierce proponent of all things efficient; all my views are through the lens of efficiency and the benefits it brings to the whole market and value chain – farmers, grain companies, processors, and ultimately the consumer.  Unlike Mr. Robson and others, I believe there is more wealth to be created through greater efficiency and that farmers and grain companies can both be more prosperous.  I don’t believe that when one gains the other loses; Mr. Robson appears to believe (as do other guardians of the single desk) that if grain companies are making more money it must be coming out of the farmer’s pockets.

Whereas I welcome the debate, I am disappointed in the lack of substance brought forward by Mr. Robson.  Rather than attack me as a “CWB slagger”, it would have be more beneficial for all involved if Mr. Robson provided clear evidence of his support for the single desk and the CWB.  Even though he argues that my arguments are hard for him to understand, he doesn’t counter with anything factual to substantiate his argument or to discredit my facts and conclusions.

Mr. Robson’s approach assumes I am working to put an end to the CWB.  Since I have never taken that position, even on this he can provide no evidence.  I see how the CWB is not providing the net benefit that the farming community deserves and it needs to be changed or improved.  To me, that means the possible end of the single desk.  If to Mr. Robson the end of the single desk means the end of the CWB, then he should make that clear.

I apparently have failed at explaining the weaknesses I see in the single desk.  Let me try one more time:
  1. The single desk is responsible for export feed barley prices NOT being translated to the domestic market.This means that the local price of barley to the local feed lot or feed mill stays lower than it would otherwise.  Farmers end up selling barley locally for a lot less than they would otherwise.  This costs farmers a lot of money.  If the CWB used a system to translate the price better (better price transparency) then all farmers would get higher prices, and grain companies would make no more than they do now handling CWB barley.
  2. The single desk (and pooling) is responsible for a low initial payment and poor movement which, combined, has created financial hardships on durum producers.  Because of the lack of cash flow, many durum farmers sold high quality durum into the local feed market.  Now the CWB is scrambling for high quality durum for offshore sales; one vessel has been in Vancouver since Sept 19th and is still waiting for durum.  The demurrage bill will be in the millions and will be paid for by farmers.  If the CWB provided better upfront pricing and more flexible delivery options, this would not have happened.
  3. Price comparisons show the pool returns are consistently below THE LOWEST daily prices over a crop year that the US farmer can sell at. Even if the US farmer sells at the lowest price he sees all year, he still gets more than Western Canadian farmers.
If Mr. Robson and his colleagues cannot see that these represent hundreds of millions in losses by the single desk to him and his neighbours, then I’m afraid I am not equipped to convince him otherwise.

But I will repeat – when it comes to CWB board candidates, give your full consideration to those candidates that are willing to look critically at all the CWB is doing.  It must work for farmers to be sustainable.  And that means judge on more than rhetoric; consider those candidates that are willing to make hard decisions.  

But most of all, ask any incumbent who stands to protect the single desk, what they’ve been doing for the last four years.  They’ve got a lot to answer for.

Mr. Robson's letter:

Dear Editor

For some time now private market commentators have slagged the CWB.  These attacks alternate between the paid for puppet farm organizations like the Wheat or Barley Growers and the direct Trade paid market commentators.

Commentator Mr. John De Pape, as a former Cargill employee and a tireless promoter of margin trading activities is one of these CWB slaggers.  His reports are laden with meaningless jargon designed to make him sound like an academic criticizing the Canadian Wheat Board.  This rings more than a little hollow when you realize that the CWB returns more than 95% of market revenue back to us as the benefiting farmers.  The demise of the CWB would allow Mr. De Pape and his private trade friends to profit from more margin trading at the expense of farmers.

How reliable have Mr. De Pape’s comments been?  In 2003 he said barley exports had dwindled to “insignificance.”  In the same report he also complained it is “short-sighted” for the CWB to charge a premium price to U.S. and Canadian malsters.  This is a magical way of saying farmers should take less for their grain, presumably by allowing Mr. De Pape and his friends in the private trade to claim their margin instead.  

This is typical of Mr. De Pape’s short sighted thinking.  Fast forward to 2010, what do we see?  The high Canadian dollar has taken the bloom off the cattle market, the Russians just stopped all grain exports, malting and feed barley sales are booming.  Lucky we still have the Wheat Board to negotiate the best deals in all the market conditions.  It is a good thing that nobody took Mr. De Pape too seriously back then, unless of course you count our failed ostrich farmer Federal Agriculture Minister and a few oil barony Alberta ranchers.  

Is there a connection to this flood of self-serving trade commentary and this years CWB Farmer Director Elections?  Yes there is a connection.  Please vote for Farmer CWB Directors that fully support the CWB.

Ian L Robson
Deleau, Manitoba


  1. Someone thought I should include my relevant credentials - why I might be equipped to discuss these issues:

    Yes, I worked for Cargill – one of the best places in the industry to learn how the markets work and how they are meant to work.

    I was a floor trader at the WCE – another great experience in terms of understanding that portion of the business.

    As a consultant I worked for the Federal Competition Bureau (Industry Canada) on all grain related files, such as the merger of Agricore and UGG, the sale of a Vancouver Terminal by Agricore United, the proposed JRI-SWP terminal joint venture (which did not go through), and the CN purchase of BC Rail (specifically the impact on Peace River grain handling and transportation).

    As a consultant, I worked for the Office of the Auditor General on the special audit of the Canadian Wheat Board.

    Also, I have a Masters in Business Administration (MBA) - Agribusiness.

  2. Most people hesitate to take on hardline Socialist-Robson kind of guys head to head because they will publicly piss on you.

    They have no qualms about confiscating private property (hoping to grab a few bucks); no reservation about sending his fellow farmers to jail so that he can feel good bragging about the punitive power (never the consequences) of a monopoly; no respect for a neighbor's choice to sell, or hold, or tithe the products they grew; and no professional regard for the wisdom or knowledge expressed by those who have dedicated time to instituted learning .

    A person who is willing to wrest away another's choice, will gleefully piss on any idea that does not conjugate monopolist dogma, depending upon a steady stream to quelch every marketing choice fire.

    They are what they are.

    Ignore the Robsons, and continue to tell us what you have learned.


  3. Hmm... maybe Mr. Robson can fill in some blanks for us. He says,

    "This rings more than a little hollow when you realize that the CWB returns more than 95% of market revenue back to us as the benefiting farmers."

    I've never seen any evidence to back up this statement. I thought the actual market revenue numbers were kept confidential. Maybe I've missed it somewhere. If Mr. Robson could show us where to find this information it would be most helpful.

  4. John, can you work through the Malt cash plus programm and help us make some sense of what is or is not being offered.