Letter to the Star Pheonix Editor

Below is a letter to the editor submitted by Stuart Thiessen to Saskatoon's Star Pheonix.  My response follows:

Treat CWB like Canpotex
 By Stuart Thiesson
Premier Brad Wall received a 73.3 per cent approval rating in a recent poll. He deserves congratulations for his energetic and passionate campaign against BHP Billiton's bid to take over the PotashCorp.

Wall also vigorously defended Canpotex, the orderly marketing arm of PCS that BHP showed little interest in joining.

He understands that permitting BHP to market independently would result in cutthroat competition for market share through price cuts, thereby reducing revenues to Saskatchewan.

Grain producers face the same prospect should the Harper government succeed in scrapping the Canadian Wheat Board's single desk sales of export wheat and barley.

In September 2009, World Trade Organization talks resumed. On the basis of a draft test the CWB would be eliminated, without farmers' input.

Canada agreed in 2004 that guarantees for CWB initial payments and borrowing will be eliminated. This even though the guarantees, which have cost the government nothing, allow the CWB to ensure farmers receive at least the initial payment.

While the Conservative government says it only wants to give farmers a marketing choice, the CWB's single-desk operation cannot succeed without Ottawa's guarantees since it has no capital assets or marketing facilities for credit purposes.

Farmers would be forced to depend on multinational grain companies to market their export grains in price competition with grains these companies market from other countries. The CWB has provided true market competition to the multinationals.

If Wall understands the vital role Canpotex plays in potash marketing, I'm certain he understands the threat facing farmers and the CWB.

I hope he uses his office to no less effect in defending the board and its excellent marketing record.

Stuart Thiesson

My response:

Dear Editor:
I would like to address some misstatements and misunderstandings about the CWB by Mr. Stuart Thiessen in a November 13th letter, “Treat CWB like Canpotex”.

Mr. Thiessen is wrong when he says the government guarantees to the CWB have cost the government nothing.

Whenever the CWB Initial Payment is more than the CWB actually received as revenue, there is a shortfall.  That shortfall is made up by the government.  The last time there was a deficit, in 2003, the government guarantee cost taxpayers over $85 million.  Since 1980, there have been four deficits in the spring wheat pool, four in feed barley; and one in durum.

The large pool deficits in 90/91 (over $1 billion in total) caused the CWB to be conservative in setting initial payment levels thereafter.  These low initial payments, although prudent in terms of managing the risk to the taxpayer, are responsible for low cash flows for farmers, causing serious financial hardship to the western Canadian economy. 

Mr. Thiessen sticks his neck out by stating – as if fact – that the CWB’s single desk operation cannot succeed without Ottawa’s guarantees. This is rhetoric, plain and simple, based on very simplistic and protective thinking among the CWB leadership.  Recent analysis and discussions have shown that the CWB could indeed succeed in an open market, even without the government guarantee.

Mr. Thiessen also refers to the CWB’s “excellent marketing record”.  If you listen only to the CWB itself, you would come to that conclusion.  But if you look at all the available evidence, you will come to a completely different conclusion.  I suggest Mr. Thiessen do his own research; he will find that the single desk does not provide the value that the CWB would like him to think it does.

The problem with the debate over the CWB is that it often deals in misleading and erroneous commentary.  Let’s get the facts and not be afraid of the potential and opportunity that is being overlooked.

John De Pape, Winnipeg