Thursday, May 5, 2011

"I believe in democratic principles"

Concerned about my assertion that the future of the single desk shouldn’t be left up to permit book holders, someone calling himself (or herself) “I believe in democratic principles” wrote this on my blog:

“Why should a school teacher, truck driver or shop keeper have any say in how I run my business and market my grain?  Do I have a say in how much of a raise the teachers get or how much the shop keeper charges for his product?  As for if a person votes conservative it doesn’t mean they support their entire mandate.  A person would hope that they would leave it up to the people that grow the grain to decide how to market it, not everyone that lives in the MP’s riding.”
Since I guess I wasn’t very clear before, here’s my take on it.

It has never been proven that the single desk of the CWB adds any revenue to the farmers of Western Canada.  The CWB has argued (supported by studies commissioned by the CWB) that it gets higher prices on behalf of farmers than they would in an open market.  Unfortunately, they don’t take into consideration enough to make the arguments comprehensive.  They don’t address the fact that the CWB costs are higher than the premiums they allegedly get (last year the CWB reported costs of over $10/tonne and premiums of about $6/tonne - a net drain on farmer revenues).  In recent years, US spring wheat farmers could sell their whole production at the lowest price of the year and still get more than Western Canadian farmers get through the CWB.

In addition, they have never considered the impact the CWB has on non-CWB crops.  I previously showed the prices of non-CWB crops such as canola and peas are lower because of the CWB.  So the CWB is a drag on all farmers – even those that don’t grow or sell CWB grains.

A farmer once told me “I don’t care if the CWB gets me the best price or not; it’s more important to me that we all get the same price.”  To me, this is selfish and narrow-minded.  And the fundamental flaw with the CWB.

So much is sacrificed for the sake of equality.  With the CWB system, farmers receive less for their efforts, regardless of what they are growing.  But farming is the foundation of rural economies across the prairies.  When farming is bad, so is everything else.  When farming is good, everyone gains.  Everyone on the prairies likes high grain prices because farmers spend more on trucks, tools and taxes.  Local economies do better when farmers make more money.

And when farming is bad enough, taxpayers – through government programs – get tapped to provide support for farmers.  Everyone – and I mean everyone – has a stake in how farmers fare.  When there is evidence that the CWB is creating a drain on rural economies, it hurts us all.  In an open and competitive market, market forces favour those that are creating the best opportunities through the simple ability to choose.  But when a quasi-governmental organization with a monopoly is the impediment of wealth creation, its future cannot be left up to those that would selfishly keep it at any cost.

I agree with the reader that brought this up; farmers should have the right to decide how to market their grain.  Absolutely.  But when it comes at a cost that we all bear, they lose the right to mandate it over the rest of us.  If it was clear and undeniable that the CWB created wealth for Western Canada, we wouldn’t be having this conversation.

I believe in economic or "market" principles.  Because there is nothing more democratic than the market.

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