Sunday, January 30, 2011

Wayne Easter defends the CWB with incomplete information

In a Jan 29th letter to the editor in the Ottawa Citizen, Wayne Easter, MP and Liberal Ag Critic, takes aim at David Anderson’s position on the Canadian Wheat Board (CWB), but he’s shooting blanks.

This was in response to a letter to the editor in the Jan 22nd Ottawa Citizen where David Anderson, MP Cypress Hills-Grasslands and Parliamentary Secretary for the Canadian Wheat Board, said that Western Canadian farmers “pay a high price to endure the limitations of the CWB's marketing attempts”.

Mr. Easter argues the CWB earns premiums for Western Canadian farmers, specifically mentioning 2008-09 where the CWB reported premiums of $6.65 per tonne for wheat, $15.37 per tonne for durum and $14.65 for malt barley.  Mr. Easter’s incomplete accounting fails to recognize or report that these alleged premiums come at a cost – paid by farmers.

The CWB reports its marketing costs to the federally appointed Grain Monitor, at least for wheat and durum (the grain monitor doesn’t report on barley).  The CWB reported that its costs in 2008-09 were $8.44 per tonne for wheat and $28.38 per tonne for durum.  This means the net result of CWB marketing activity – premiums minus the costs to earn them – is a net cost of $1.79 per tonne on wheat and a net cost of $13.01 per tonne on durum.

Applied to all the grain marketed by the CWB that year, this means CWB marketing in 2008-09 represented a net cost to farmers of $28.5 million on wheat and $55.7 million on durum. 

Mr. Easter should take note that these are the CWB’s own numbers – both the premiums achieved and the costs to achieve them.  Mr. Easter is eager to see the figures for the 2009-10 crop year when they are presented to Parliament; let’s hope he doesn’t make the same mistake of ignoring the cost of CWB marketing again.

And this is only a partial story; this does not include the non-marketing costs of the CWB, the higher system costs with the CWB, the higher farm costs due to the CWB (higher interest and storage costs) and the fact that US farmers get paid more than Western Canadian farmers through the CWB (in most years, farmers in North Dakota and Montana, growing competing crops of wheat and durum, could sell their whole crop at the lowest price of the year and still get more than Western Canadian farmers through the CWB).

Before Mr. Easter criticizes his colleagues of perpetuating misinformation, he should make sure he has complete information or else he may himself be criticized of perpetuating misleading information.

1 comment:

  1. Well put John! Did you submit this to the Ottawa Citizen? If you haven't then I would urge you to do so.

    I'd like to thank you for the information you provide here. It is a great resource and I always find it very interesting. I used to be a board supporter but I can't afford to be anymore! It is time for a change, surely we can't do any worse!