Tues June 24 2008
I received the following email yesterday, and thought it might be on
interest to you all. You might remember the column it refers to as the
one in which I compared parts prices in Sk and North Dakota. I have
removed the editor's name from the email. Suffice it to say it came from
very close to home. The implement dealer I think is behind this has been
a great fan of the Western Cdn Wheat Growers so it was likely a good
opportunity to knock me off entirely. So much for the freedom of the
press and free enterprise to boot. I don't really blame the editor. They
have 2 small papers and advertising from the dealership is constant and
likely quite important. However, it does give a window into how the
world runs. Notice that they didn't claim what I said was wrong....
Cheers,
Paul
Paul
I am sorry to inform you that we are unable to run your column any
longer.
As you probably know the Column that you wrote about the implement
dealers
has caused quite an uproar and they are no longer advertising in our
paper.
They said they may continue to run if we remove your column completely,
so
regrettably we have to discontinue your column.
Please send your final bill and we will get you paid up.
Wednesday, June 25, 2008
Monday, June 23, 2008
Conservative's CWB Strategy Loses in Court, Again
Column # 675 23/06/08
Chalk up another loss for Stephen Harper's government at the hands of
the Canadian Constitution. Two years ago then Agriculture Minister Chuck
Strahl slapped a gag order on the Canadian Wheat Board, prohibiting it
from doing anything to defend itself against attacks by the government
or the small anti-CWB groups that have sole access to the Minister's
ear. The CWB appealed this order to the federal court of Canada and the
ruling finally came down at the end of last week. Once again, as has
happened twice before, the Harper government was judged to have broken
the laws of the country in regard to the CWB.
Defenders of the gag order maintained it merely prevented the CWB from
spending farmers' money on propaganda. The federal court judge saw it
otherwise, saying, "It is entirely clear, therefore, that the directive
is motivated principally to silencing the Wheat Board in respect of any
promotion of a 'single desk' policy that it might do."
In fact, the gag order even prevented the Board from putting on its
website independent academic studies conducted at the University of
Saskatchewan and other such institutions. In this regard, the
government's strategy, as revealed in recent court documents seems to
have worked. Support for the CWB edged downward slightly in the recent
poll the Board conducted. As the independent pollster commented, if you
allow one side to speak and gag the other, the side able to put out its
message will gain support.
The CWB has now taken the federal government to court over four issues.
It has won three of them. The fourth was also ruled on last week. It was
the appeal of the government order requiring the CWB to pay Greg Arason
the paltry sum of $30,000 per month when the government fired Adrian
Measner and imposed Arason on the CWB as CEO.
Legally, the government could do that, since the CWB Act allows it to
appoint the CEO. However, the act also says that the directors set the
salary for the CEO. Harper's government refused to allow the CWB to do
this. The Board appealed, with the judge ruling that the case was now
moot. This means, essentially, that it is irrelevant, because Arason is
no longer the CEO, having taken his pitiful allowance and retired to
Florida.
Here again the government's strategy seems to have worked. The court
system moved so slowly that Arason did his appointed tenure, and his
damage as CEO, and got out while the getting was good, long before the
court caught up with his political masters. Had the court acted in a
timely manner, the government might not have been able to impose its
will on the directors whom farmers elected to run the CWB. The positive
aspect of the court decision is that it reaffirmed strongly that running
the CWB is the job of the directors, not the government.
Given the outcome of the three cases the courts did rule on, all in the
CWB's favor, you have to think the government has some pretty lousy
lawyers working for it if they keep advising courses of action that are
illegal. Not true, I suspect. The government's lawyers likely knew the
actions the government undertook were illegal, but the government went
ahead, knowing that it would accomplish some of its goals anyway. As I
said earlier, it did seem to improve its position in the battle for
public opinion, even if it ultimately lost the war at the courts. Same
for the firing of Measner and appointment of Arason. Among other things,
Arason fired Deanna Allen, as the anti-CWB groups had demanded, and got
his golden handshake.
It's a pretty cynical way for a government to act, but the government
appears to have gotten away with it to a great extent. While these
actions were condemned by some major farm groups, like Keystone
Agriculture Producers, the National Farmers Union and the Canadian
Federation of Agriculture, others were less vocal. APAS and SARM, the
farm groups in Saskatchewan that claim to have the broadest
constituencies, were silent on the government's illegal actions. Nor
should you expect much reaction now. SARM has effectively dropped out of
farm policy, while APAS is too busy firing its policy people to look up
from the vantage point it has between its legs. The APAS executive is
unlikely to criticize anything Conservative, no matter how undemocratic.
What's next on Harper's agenda for the CWB? Expect it to come in the
form of attempting to Gerry-mander the upcoming CWB director elections.
Harper's response to the court ruling was to maintain he would break the
CWB's single desk, no matter what, threatening to "walk over" anyone who
stands in his way. For now, however, the courts have said that even
Harper's government can't walk over the Canadian Constitution.
(c) Paul Beingessner
Chalk up another loss for Stephen Harper's government at the hands of
the Canadian Constitution. Two years ago then Agriculture Minister Chuck
Strahl slapped a gag order on the Canadian Wheat Board, prohibiting it
from doing anything to defend itself against attacks by the government
or the small anti-CWB groups that have sole access to the Minister's
ear. The CWB appealed this order to the federal court of Canada and the
ruling finally came down at the end of last week. Once again, as has
happened twice before, the Harper government was judged to have broken
the laws of the country in regard to the CWB.
Defenders of the gag order maintained it merely prevented the CWB from
spending farmers' money on propaganda. The federal court judge saw it
otherwise, saying, "It is entirely clear, therefore, that the directive
is motivated principally to silencing the Wheat Board in respect of any
promotion of a 'single desk' policy that it might do."
In fact, the gag order even prevented the Board from putting on its
website independent academic studies conducted at the University of
Saskatchewan and other such institutions. In this regard, the
government's strategy, as revealed in recent court documents seems to
have worked. Support for the CWB edged downward slightly in the recent
poll the Board conducted. As the independent pollster commented, if you
allow one side to speak and gag the other, the side able to put out its
message will gain support.
The CWB has now taken the federal government to court over four issues.
It has won three of them. The fourth was also ruled on last week. It was
the appeal of the government order requiring the CWB to pay Greg Arason
the paltry sum of $30,000 per month when the government fired Adrian
Measner and imposed Arason on the CWB as CEO.
Legally, the government could do that, since the CWB Act allows it to
appoint the CEO. However, the act also says that the directors set the
salary for the CEO. Harper's government refused to allow the CWB to do
this. The Board appealed, with the judge ruling that the case was now
moot. This means, essentially, that it is irrelevant, because Arason is
no longer the CEO, having taken his pitiful allowance and retired to
Florida.
Here again the government's strategy seems to have worked. The court
system moved so slowly that Arason did his appointed tenure, and his
damage as CEO, and got out while the getting was good, long before the
court caught up with his political masters. Had the court acted in a
timely manner, the government might not have been able to impose its
will on the directors whom farmers elected to run the CWB. The positive
aspect of the court decision is that it reaffirmed strongly that running
the CWB is the job of the directors, not the government.
Given the outcome of the three cases the courts did rule on, all in the
CWB's favor, you have to think the government has some pretty lousy
lawyers working for it if they keep advising courses of action that are
illegal. Not true, I suspect. The government's lawyers likely knew the
actions the government undertook were illegal, but the government went
ahead, knowing that it would accomplish some of its goals anyway. As I
said earlier, it did seem to improve its position in the battle for
public opinion, even if it ultimately lost the war at the courts. Same
for the firing of Measner and appointment of Arason. Among other things,
Arason fired Deanna Allen, as the anti-CWB groups had demanded, and got
his golden handshake.
It's a pretty cynical way for a government to act, but the government
appears to have gotten away with it to a great extent. While these
actions were condemned by some major farm groups, like Keystone
Agriculture Producers, the National Farmers Union and the Canadian
Federation of Agriculture, others were less vocal. APAS and SARM, the
farm groups in Saskatchewan that claim to have the broadest
constituencies, were silent on the government's illegal actions. Nor
should you expect much reaction now. SARM has effectively dropped out of
farm policy, while APAS is too busy firing its policy people to look up
from the vantage point it has between its legs. The APAS executive is
unlikely to criticize anything Conservative, no matter how undemocratic.
What's next on Harper's agenda for the CWB? Expect it to come in the
form of attempting to Gerry-mander the upcoming CWB director elections.
Harper's response to the court ruling was to maintain he would break the
CWB's single desk, no matter what, threatening to "walk over" anyone who
stands in his way. For now, however, the courts have said that even
Harper's government can't walk over the Canadian Constitution.
(c) Paul Beingessner
Monday, June 16, 2008
Farmers Pay the Piper, Someone Else Calls the Tune
Column # 674 16/06/08
Just an opinion here, but if ever there was an issue that farmers have
messed up, it has to be the issue of control over new plant varieties.
There was a time when development of new crop varieties was largely done
by universities and federal and provincial government research centres.
Varieties were distributed to grower organizations and royalties were
collected from them based on seed sales. The system worked, according to
plant breeders I've talked to.
It worked that is, for farmers and plant breeders. However, chemical
companies began to see the possibility of integrating sales of chemicals
with seed sales. If they could just breed plants that required their
chemicals, what a wonderful world it would be. Even better if they could
make money off the sale of both the chemical and the seed. The cherry on
top would be if farmers had to buy the seed every year.
Of course, all this wasn't possible within the legislative framework
that existed twenty years ago. The Plant Breeders Rights Act changed all
that. It continued to allow farmers to save seed for their own use, but
disallowed them from selling it, or giving it away to anyone. It allowed
companies, in effect, to control the release of varieties. Largely,
these were not varieties any company had developed, since most research
continued to be done with public and farmer money. Companies simply bid
for the right to "own" a variety. The trade-off was that money from the
purchasing of the rights to a variety went back to fund further
research. The problem was that farmers were now also contributing to the
fattening of the profits of seed companies.
Plant breeders rights were expanded further when governments, like
Canada, decided they would allow for the patenting of life forms. This
had been a no-no for as long as patents existed. The result, besides all
the bio-piracy that ensued, was to see companies patenting genes from
plants. This gave them the right to control not just the seed the farmer
planted, but also the seed he grew, so that companies are now able to
force farmers to follow their every dictum if they want to grow certain
varieties. An example in Canada is the requirement imposed by several
rights holders that you sell your production through certain channels,
and not to anyone else.
Farmers have always played a part in funding plant breeding. This has
been done through royalties they pay on certified seed and through
check-offs on the sale of crops. An example is the wheat and barley
check-off administered by the Canadian Wheat Board. In fact, if you get
right down to it, farmers or taxpayers pay for all plant breeding.
Private companies that do some breeding simply use money derived from
seed sales to farmers. A lot more of that money goes to other things.
One plant breeder working for a multinational company complained to me
that he would be ecstatic if his research budget was even a small
fraction of the money the company spent on advertising.
The trouble with plant breeding today is that research done by the
public sector is increasingly being turned over to the private sector to
allow it to make greater profits from farmers. The public good seems
forgotten in all this. And we are barely seeing the tip of the iceberg.
Farmers are still growing many varieties that were registered under the
old system and before the craze for proprietary ownership took over.
Immediately following the implementation of Plant Breeders Rights, few
varieties were covered. Now, virtually every new variety that comes out
is protected by PBRs. As well, chemical seed and grain companies like
Viterra and Farm Pure Seeds are increasingly tying up farmers with
contractual arrangements which don't even allow them to save their own
seed of publicly developed varieties.
And ultimately, farmers are to blame for this. They could have a great
deal of control over the registration process, since they contribute
huge amounts to plant breeding, and they have input through
organizations like the Western Grains Research Foundation, but they've
allowed a system to develop that serves the best interests of seed
companies and seed growers. And don't think it's done yet. Seed growers
have been lobbying for such measures as requiring the use of pedigreed
seed if you want to participate in crop insurance programs.
Transnationals like Monsanto want to collect royalties when the farmer
sells his crop to be sure they get every pound of flesh available.
A recent report done for the federal government might have some
implications for all this. The report on "Inter-Sectoral Partnerships
for Non-Regulatory Federal Laboratories" is suggesting a new research
center be developed. It would be called the Canadian Cereal Research and
Innovation Laboratory (CCRIL) and would bring together many of the
agencies involved in cereal research. While this may be as simple as
housing different agencies under a single roof, the implications may
reach further. The report strongly suggested that the best model for
research was one that integrated federal government research agencies
with provincial universities and the private sector under a management
scheme that was independent of the federal government.
Given the bent of the current federal government, this sounds an awful
lot like privatisation to me. However, the proponents of the CCRIL are
mostly public sector. They include the Canadian Grain Commission, the
Canadian International Grains Institute, the University of Manitoba and
the Canadian Wheat Board.
Perhaps the notion of a new research center opens an opportunity for
farmers to re-examine the registration system and who benefits from it.
It really is time the guy paying the piper started to call the tune.
(c) Paul Beingessner
Just an opinion here, but if ever there was an issue that farmers have
messed up, it has to be the issue of control over new plant varieties.
There was a time when development of new crop varieties was largely done
by universities and federal and provincial government research centres.
Varieties were distributed to grower organizations and royalties were
collected from them based on seed sales. The system worked, according to
plant breeders I've talked to.
It worked that is, for farmers and plant breeders. However, chemical
companies began to see the possibility of integrating sales of chemicals
with seed sales. If they could just breed plants that required their
chemicals, what a wonderful world it would be. Even better if they could
make money off the sale of both the chemical and the seed. The cherry on
top would be if farmers had to buy the seed every year.
Of course, all this wasn't possible within the legislative framework
that existed twenty years ago. The Plant Breeders Rights Act changed all
that. It continued to allow farmers to save seed for their own use, but
disallowed them from selling it, or giving it away to anyone. It allowed
companies, in effect, to control the release of varieties. Largely,
these were not varieties any company had developed, since most research
continued to be done with public and farmer money. Companies simply bid
for the right to "own" a variety. The trade-off was that money from the
purchasing of the rights to a variety went back to fund further
research. The problem was that farmers were now also contributing to the
fattening of the profits of seed companies.
Plant breeders rights were expanded further when governments, like
Canada, decided they would allow for the patenting of life forms. This
had been a no-no for as long as patents existed. The result, besides all
the bio-piracy that ensued, was to see companies patenting genes from
plants. This gave them the right to control not just the seed the farmer
planted, but also the seed he grew, so that companies are now able to
force farmers to follow their every dictum if they want to grow certain
varieties. An example in Canada is the requirement imposed by several
rights holders that you sell your production through certain channels,
and not to anyone else.
Farmers have always played a part in funding plant breeding. This has
been done through royalties they pay on certified seed and through
check-offs on the sale of crops. An example is the wheat and barley
check-off administered by the Canadian Wheat Board. In fact, if you get
right down to it, farmers or taxpayers pay for all plant breeding.
Private companies that do some breeding simply use money derived from
seed sales to farmers. A lot more of that money goes to other things.
One plant breeder working for a multinational company complained to me
that he would be ecstatic if his research budget was even a small
fraction of the money the company spent on advertising.
The trouble with plant breeding today is that research done by the
public sector is increasingly being turned over to the private sector to
allow it to make greater profits from farmers. The public good seems
forgotten in all this. And we are barely seeing the tip of the iceberg.
Farmers are still growing many varieties that were registered under the
old system and before the craze for proprietary ownership took over.
Immediately following the implementation of Plant Breeders Rights, few
varieties were covered. Now, virtually every new variety that comes out
is protected by PBRs. As well, chemical seed and grain companies like
Viterra and Farm Pure Seeds are increasingly tying up farmers with
contractual arrangements which don't even allow them to save their own
seed of publicly developed varieties.
And ultimately, farmers are to blame for this. They could have a great
deal of control over the registration process, since they contribute
huge amounts to plant breeding, and they have input through
organizations like the Western Grains Research Foundation, but they've
allowed a system to develop that serves the best interests of seed
companies and seed growers. And don't think it's done yet. Seed growers
have been lobbying for such measures as requiring the use of pedigreed
seed if you want to participate in crop insurance programs.
Transnationals like Monsanto want to collect royalties when the farmer
sells his crop to be sure they get every pound of flesh available.
A recent report done for the federal government might have some
implications for all this. The report on "Inter-Sectoral Partnerships
for Non-Regulatory Federal Laboratories" is suggesting a new research
center be developed. It would be called the Canadian Cereal Research and
Innovation Laboratory (CCRIL) and would bring together many of the
agencies involved in cereal research. While this may be as simple as
housing different agencies under a single roof, the implications may
reach further. The report strongly suggested that the best model for
research was one that integrated federal government research agencies
with provincial universities and the private sector under a management
scheme that was independent of the federal government.
Given the bent of the current federal government, this sounds an awful
lot like privatisation to me. However, the proponents of the CCRIL are
mostly public sector. They include the Canadian Grain Commission, the
Canadian International Grains Institute, the University of Manitoba and
the Canadian Wheat Board.
Perhaps the notion of a new research center opens an opportunity for
farmers to re-examine the registration system and who benefits from it.
It really is time the guy paying the piper started to call the tune.
(c) Paul Beingessner
Tuesday, June 10, 2008
American Farmers Get Break on Parts
Column #673 American Farmers Get Break on Parts 09/06/08
As we shared the loading of a producer car last week, my cousin shook
his head in amazement. "You know, half of this car is worth about
$20,000." It put a bit of a glow on an otherwise cool day to realize
that he was right. High protein number one durum is at a premium price
this year and dropping it into a producer car put the icing on the cake.
I grabbed the mail on the way home when the job was done. I should have
waited a while to open it, what with the glow still lingering. The fuel
bill that came in that day's mail wiped off my smile and caused a
reassessment of my good fortune. Call it sticker shock, I guess, but the
bill for diesel fuel that accompanied this year's seeding brought a
different kind of shine to my face. That last fill cost me $1.15 per
litre for diesel, while gasoline carried a price of $1.21 a litre.
It prompted me to dig out last year's spring fuel bill. Back then, durum
may have been a fraction of today's price, but so was fuel, with diesel
at 72.9 cents a litre and gasoline at $106.9. Probably few farmers are
assuming the price has peaked either. If gasoline might hit $1.50 by
July, we can expect diesel to be close behind.
The increase in fuel costs has prompted many urban motorists to blow the
dust off the bicycle and has even started some debating the merits of
the city bus. Farmers don't get much use from those two items, burdened
down as we are by fuel tanks and tools and large implements, but farmers
too are looking for ways to cut fuel consumption.
When it comes to buying parts however, they may want to consider the
benefits of burning a bit more fuel, at least if they're within driving
distance of the U.S. Equipment parts, of every type and for every brand,
appear to be much lower priced in our neighbour to the south. While I
might have been able to understand this when the Canadian dollar was at
70 cents U.S., it becomes a bit more difficult to swallow when the
dollar is at par, or higher.
How big are the differences? I did some comparisons between prices in
Saskatchewan and in Minot, North Dakota, about 240 miles south east of
my farm. The differences were strikingly consistent, from John Deere to
New Holland to CIH and Versatile. Parts at Minot were generally about 24
percent lower than the same part in Saskatchewan. This held not only
from one manufacturer to another, but from tractors to haybines to
balers, and from small items to big.
A tachometer for an ageing 3020 John Deere tractor will set you back
$283 in Saskatchewan but only cost $230 in Minot. A hydraulic pump for a
somewhat newer 4430 costs $2,171 in Regina but you could save $421 by
taking that trip to North Dakota. A remanufactured engine for a 8460
John Deere tractor finds a price of $12,900 in Minot, but somehow is
worth $15,983 when the currency and location are Canadian.
While car buyers have complained bitterly about the difference in auto
prices between here and the U.S., to some positive effect, farmers have
been rather quiet about the prices they have to pay for parts. One
fellow at a parts counter assured me that the price difference had
indeed declined recently, but that only served to make me more annoyed
as I contemplated the rip-off I have apparently been enduring for some
time. He also said that the price spread on new equipment was hurting
their business.
Not every farmer in the west is close enough to a major U.S. city to run
down for every parts order. However, the farmer who needs a big ticket
repair item, or who compiles a list of smaller ones might find a
handsome reward in taking a trip south. If enough farmers do it,
Canadian dealers will have to find ways to pressure their parent
companies to stop treating Canadian farmers like a huge cash cow. If the
rise in the Canadian dollar has driven down the price of many of the
products we sell, we should at least be able to get some small benefit
from it.
(c) Paul Beingessner
As we shared the loading of a producer car last week, my cousin shook
his head in amazement. "You know, half of this car is worth about
$20,000." It put a bit of a glow on an otherwise cool day to realize
that he was right. High protein number one durum is at a premium price
this year and dropping it into a producer car put the icing on the cake.
I grabbed the mail on the way home when the job was done. I should have
waited a while to open it, what with the glow still lingering. The fuel
bill that came in that day's mail wiped off my smile and caused a
reassessment of my good fortune. Call it sticker shock, I guess, but the
bill for diesel fuel that accompanied this year's seeding brought a
different kind of shine to my face. That last fill cost me $1.15 per
litre for diesel, while gasoline carried a price of $1.21 a litre.
It prompted me to dig out last year's spring fuel bill. Back then, durum
may have been a fraction of today's price, but so was fuel, with diesel
at 72.9 cents a litre and gasoline at $106.9. Probably few farmers are
assuming the price has peaked either. If gasoline might hit $1.50 by
July, we can expect diesel to be close behind.
The increase in fuel costs has prompted many urban motorists to blow the
dust off the bicycle and has even started some debating the merits of
the city bus. Farmers don't get much use from those two items, burdened
down as we are by fuel tanks and tools and large implements, but farmers
too are looking for ways to cut fuel consumption.
When it comes to buying parts however, they may want to consider the
benefits of burning a bit more fuel, at least if they're within driving
distance of the U.S. Equipment parts, of every type and for every brand,
appear to be much lower priced in our neighbour to the south. While I
might have been able to understand this when the Canadian dollar was at
70 cents U.S., it becomes a bit more difficult to swallow when the
dollar is at par, or higher.
How big are the differences? I did some comparisons between prices in
Saskatchewan and in Minot, North Dakota, about 240 miles south east of
my farm. The differences were strikingly consistent, from John Deere to
New Holland to CIH and Versatile. Parts at Minot were generally about 24
percent lower than the same part in Saskatchewan. This held not only
from one manufacturer to another, but from tractors to haybines to
balers, and from small items to big.
A tachometer for an ageing 3020 John Deere tractor will set you back
$283 in Saskatchewan but only cost $230 in Minot. A hydraulic pump for a
somewhat newer 4430 costs $2,171 in Regina but you could save $421 by
taking that trip to North Dakota. A remanufactured engine for a 8460
John Deere tractor finds a price of $12,900 in Minot, but somehow is
worth $15,983 when the currency and location are Canadian.
While car buyers have complained bitterly about the difference in auto
prices between here and the U.S., to some positive effect, farmers have
been rather quiet about the prices they have to pay for parts. One
fellow at a parts counter assured me that the price difference had
indeed declined recently, but that only served to make me more annoyed
as I contemplated the rip-off I have apparently been enduring for some
time. He also said that the price spread on new equipment was hurting
their business.
Not every farmer in the west is close enough to a major U.S. city to run
down for every parts order. However, the farmer who needs a big ticket
repair item, or who compiles a list of smaller ones might find a
handsome reward in taking a trip south. If enough farmers do it,
Canadian dealers will have to find ways to pressure their parent
companies to stop treating Canadian farmers like a huge cash cow. If the
rise in the Canadian dollar has driven down the price of many of the
products we sell, we should at least be able to get some small benefit
from it.
(c) Paul Beingessner
Bemoaning the State of the Beef Industry
Column # 672 Bemoaning the State of the Beef Industry 02/06/08
From time to time, folks commenting on the state of the beef industry
in Canada will bemoan the fact that, post-BSE, we are still heavily
dependent on the U.S. as a market for our cattle. It seems, in fact,
that we have ramped up cattle exports to our southern neighbour to the
point where they now exceed the numbers we were shipping before Mad Cow
reared its ugly head.
While the moaners usually don't blame any specific group for this
short-sightedness, preferring instead to use the meaningless "we", it is
clear farmers are seen as one of the guilty parties. And they should be,
but not in the way you might think. Farmers in many parts of Canada did
their best to generate other ways of marketing their beef. They
supported a number of new beef slaughtering initiatives, most of them
focused on developing niche markets for some specialty type of beef, be
it grass-fed, natural, or cull cow. This is what they did, but
unfortunately the results have been less than sterling. Most of the
plans came to nothing, and most of those that got beyond the planning
stage didn't last long after opening.
These two things, the failure of local initiatives and the renewed focus
on American markets were predicted by many and were completely logical.
The local initiatives were doomed from the start. Most relied on overly
optimistic scenarios generated by consultants who knew that a consultant
with negative reports will have a relatively short career. They were
likely the same consulting firms that a decade ago were recommending a
pulse processing plant at every siding. Prior to that, they made their
living by recommending hog barns ad infinitum.
In truth, niche markets for specially raised beef have always been quite
limited. Even discriminating consumers will only pay a small premium for
their vices. And the cull cow and bull operations have to compete with a
product that oozes from the large packers in unbelievable quantities.
Competing head on with Cargill is not a recipe for success.
That Canadian cattle are again gravitating to the U.S. in huge numbers
is scant surprise. Cattle will go where the cheapest feed and the lowest
cost labour are found. American corn, biofuel demand notwithstanding, is
still a cheaper feed than nearly anything else. And Alberta's packing
plants, the largest in Canada, are competing for labour with a booming
oil sector that pays real wages.
That my friends is the free market. In today's environment of global,
monopoly capitalism, farmers can have little impact on the direction
that market moves. There certainly never was any opportunity for farmers
to somehow influence the development of new markets for Canadian beef.
Farmers are not players in the packing industry today, except in Quebec.
That business is held tightly in the grip of about four companies. They
are the ones who develop markets, and they do so in whatever way suits
their needs, not the needs of Canadian farmers and ranchers. Nor is
their much point blaming the big packers. They are just doing what they
are able to do in an environment where there are few rules.
In light of this, why do I say that farmers are to blame? It is because
farmers typically see only three possible responses to a melt-down like
that caused by BSE. They can fold and leave the industry, they can
decide to tough it out and hope for better times, or they can remain
peripherally in the industry while finding other ways to make a living.
The other possibility, that of working together to find the root causes
of the industry's troubles and exploring alternative ways of organizing
the industry, doesn't seem to be on the radar for farmers.
Now, as feedlots close in beef country we are told to find a new way of
raising our cattle. Feed grains are too expensive so cattle must stay on
grass longer and face shorter periods in a feedlot. This is not a bad
thing. It may in fact be a good thing from an environmental and animal
welfare point of view. But the reality is that farmers are told to keep
their calves six to 12 months longer, and then sell them for the same
price they were getting for six-month-old calves in 2002. How does that
work?
Meanwhile, beef industry observers are telling us that those who hang on
are going to be the winners when the price eventually goes up. Sounds
like some consultants I know...
(c) Paul Beingessner
From time to time, folks commenting on the state of the beef industry
in Canada will bemoan the fact that, post-BSE, we are still heavily
dependent on the U.S. as a market for our cattle. It seems, in fact,
that we have ramped up cattle exports to our southern neighbour to the
point where they now exceed the numbers we were shipping before Mad Cow
reared its ugly head.
While the moaners usually don't blame any specific group for this
short-sightedness, preferring instead to use the meaningless "we", it is
clear farmers are seen as one of the guilty parties. And they should be,
but not in the way you might think. Farmers in many parts of Canada did
their best to generate other ways of marketing their beef. They
supported a number of new beef slaughtering initiatives, most of them
focused on developing niche markets for some specialty type of beef, be
it grass-fed, natural, or cull cow. This is what they did, but
unfortunately the results have been less than sterling. Most of the
plans came to nothing, and most of those that got beyond the planning
stage didn't last long after opening.
These two things, the failure of local initiatives and the renewed focus
on American markets were predicted by many and were completely logical.
The local initiatives were doomed from the start. Most relied on overly
optimistic scenarios generated by consultants who knew that a consultant
with negative reports will have a relatively short career. They were
likely the same consulting firms that a decade ago were recommending a
pulse processing plant at every siding. Prior to that, they made their
living by recommending hog barns ad infinitum.
In truth, niche markets for specially raised beef have always been quite
limited. Even discriminating consumers will only pay a small premium for
their vices. And the cull cow and bull operations have to compete with a
product that oozes from the large packers in unbelievable quantities.
Competing head on with Cargill is not a recipe for success.
That Canadian cattle are again gravitating to the U.S. in huge numbers
is scant surprise. Cattle will go where the cheapest feed and the lowest
cost labour are found. American corn, biofuel demand notwithstanding, is
still a cheaper feed than nearly anything else. And Alberta's packing
plants, the largest in Canada, are competing for labour with a booming
oil sector that pays real wages.
That my friends is the free market. In today's environment of global,
monopoly capitalism, farmers can have little impact on the direction
that market moves. There certainly never was any opportunity for farmers
to somehow influence the development of new markets for Canadian beef.
Farmers are not players in the packing industry today, except in Quebec.
That business is held tightly in the grip of about four companies. They
are the ones who develop markets, and they do so in whatever way suits
their needs, not the needs of Canadian farmers and ranchers. Nor is
their much point blaming the big packers. They are just doing what they
are able to do in an environment where there are few rules.
In light of this, why do I say that farmers are to blame? It is because
farmers typically see only three possible responses to a melt-down like
that caused by BSE. They can fold and leave the industry, they can
decide to tough it out and hope for better times, or they can remain
peripherally in the industry while finding other ways to make a living.
The other possibility, that of working together to find the root causes
of the industry's troubles and exploring alternative ways of organizing
the industry, doesn't seem to be on the radar for farmers.
Now, as feedlots close in beef country we are told to find a new way of
raising our cattle. Feed grains are too expensive so cattle must stay on
grass longer and face shorter periods in a feedlot. This is not a bad
thing. It may in fact be a good thing from an environmental and animal
welfare point of view. But the reality is that farmers are told to keep
their calves six to 12 months longer, and then sell them for the same
price they were getting for six-month-old calves in 2002. How does that
work?
Meanwhile, beef industry observers are telling us that those who hang on
are going to be the winners when the price eventually goes up. Sounds
like some consultants I know...
(c) Paul Beingessner
Joy in Mudville
Column # 671 Joy in Mudville 26/05/08
The drought affecting farmers in many parts of the prairie provinces is
starting to take on frightening proportions. That there is a drought is
not news for farmers south of the Trans Canada Highway, who have endured
several years of it, but even these weather-beaten folk might be
surprised to hear how far afield that drought has travelled. A recent
listing of rainfall in Saskatchewan from April 1 onward showed that the
three driest points in the province were Estevan (south east), Val Marie
(south west) and Prince Albert (north central). While a few pockets have
received adequate rain, there is a lot of dry land in between.
Travelling west on the Trans Canada last week, I saw Reed Lake, a saline
lake that butts against the highway east of Swift Current. In the spring
it is usually teeming with shorebirds and waterfowl. It was a first for
me to see the lake entirely dry, its salt-encrusted shores now extending
south to the horizon.
Closer to home, the coulees and creek that provide surface water and
shallow wells for many farmers in this area failed to run at all this
spring. It is only the second time in my life I can recall this
happening. Sloughs in the Missouri Couteau west and south of our farm,
which usually produce ducks in the spring and hay in late summer, are
dry. Pastures have hardly grown an inch or two, and farmers are
struggling to find enough grass to carry their livestock while they
await the rain. We have had no really meaningful rain since last May.
The prospect of poor crops in one of the best years for price in recent
memory might make a grain farmer glum, especially considering the value
of inputs that went into the ground with that seed. Bit it is livestock
producers who have a great deal to sweat about immediately. Most have
consumed any reserves of hay they may have had, and pastures were
overgrazed in many areas last year. Hay grows in May and June, and May
has been abysmally dry. There are about four weeks left to make a hay
crop, and it will take a lot of rain.
So it's been tough around here. I've tried to hold the cattle off their
summer pasture, as the grass is very short, and won't last long, but I
figure the spring pasture will hold them for only a few more days.
Fretting and staring at the sky have become near-constant occupations on
the farm.
Fortunately, things get put into perspective now and then, and a phone
call from a nephew did that for me today. He told a story of a rancher
in the Climax area in southwest Saskatchewan who had purchased a large
quantity of hay from my nephew's neighbour last year. The hay had to be
trucked several hundred miles. In the winter, the rancher bought the
rest of the hay. He phoned the fellow who sold the hay recently to ask
what things looked like for this year. The rancher had fed all the hay,
his pastures were bare from lack of rain and his dugouts had gone
completely dry. He had broken up some of his hay and pastureland in an
attempt to starve the flourishing gopher populations. He was now looking
for a place to pasture his cows in the northern grainbelt. No doubt his
neighbours are in the same position.
Bad as our own situation is, that story made me stop to count my
blessings. If the drought continues, we may be in that rancher's
position soon, but we aren't quite there yet.
This weekend, a bit of rain fell across much of the southern prairies.
There was great joy in mudville at the notion that crops in dry soil now
at least have a chance to germinate. It was only a half-inch, but at
least we know now that it can still rain in this country. We were
starting to doubt that.
(c) Paul Beingessner
The drought affecting farmers in many parts of the prairie provinces is
starting to take on frightening proportions. That there is a drought is
not news for farmers south of the Trans Canada Highway, who have endured
several years of it, but even these weather-beaten folk might be
surprised to hear how far afield that drought has travelled. A recent
listing of rainfall in Saskatchewan from April 1 onward showed that the
three driest points in the province were Estevan (south east), Val Marie
(south west) and Prince Albert (north central). While a few pockets have
received adequate rain, there is a lot of dry land in between.
Travelling west on the Trans Canada last week, I saw Reed Lake, a saline
lake that butts against the highway east of Swift Current. In the spring
it is usually teeming with shorebirds and waterfowl. It was a first for
me to see the lake entirely dry, its salt-encrusted shores now extending
south to the horizon.
Closer to home, the coulees and creek that provide surface water and
shallow wells for many farmers in this area failed to run at all this
spring. It is only the second time in my life I can recall this
happening. Sloughs in the Missouri Couteau west and south of our farm,
which usually produce ducks in the spring and hay in late summer, are
dry. Pastures have hardly grown an inch or two, and farmers are
struggling to find enough grass to carry their livestock while they
await the rain. We have had no really meaningful rain since last May.
The prospect of poor crops in one of the best years for price in recent
memory might make a grain farmer glum, especially considering the value
of inputs that went into the ground with that seed. Bit it is livestock
producers who have a great deal to sweat about immediately. Most have
consumed any reserves of hay they may have had, and pastures were
overgrazed in many areas last year. Hay grows in May and June, and May
has been abysmally dry. There are about four weeks left to make a hay
crop, and it will take a lot of rain.
So it's been tough around here. I've tried to hold the cattle off their
summer pasture, as the grass is very short, and won't last long, but I
figure the spring pasture will hold them for only a few more days.
Fretting and staring at the sky have become near-constant occupations on
the farm.
Fortunately, things get put into perspective now and then, and a phone
call from a nephew did that for me today. He told a story of a rancher
in the Climax area in southwest Saskatchewan who had purchased a large
quantity of hay from my nephew's neighbour last year. The hay had to be
trucked several hundred miles. In the winter, the rancher bought the
rest of the hay. He phoned the fellow who sold the hay recently to ask
what things looked like for this year. The rancher had fed all the hay,
his pastures were bare from lack of rain and his dugouts had gone
completely dry. He had broken up some of his hay and pastureland in an
attempt to starve the flourishing gopher populations. He was now looking
for a place to pasture his cows in the northern grainbelt. No doubt his
neighbours are in the same position.
Bad as our own situation is, that story made me stop to count my
blessings. If the drought continues, we may be in that rancher's
position soon, but we aren't quite there yet.
This weekend, a bit of rain fell across much of the southern prairies.
There was great joy in mudville at the notion that crops in dry soil now
at least have a chance to germinate. It was only a half-inch, but at
least we know now that it can still rain in this country. We were
starting to doubt that.
(c) Paul Beingessner
When Mud Pies Are No Longer a Game
Column # 670 19/05/08
When I was a kid, my two older sisters were experts at making mud pies.
In fact, their expertise went far beyond the lowly mud pie. They made
mud cookies, mud cakes, mud vegetables and even mud mashed potatoes.
After careful shaping and drying in the sun, they looked good enough to
eat. Which we did, sort of. Part of getting into the game, and being
allowed to be there at all, was to play along with the fantasy,
pretending to nibble at the food, while exclaiming over the skill of the
cooks.
My sisters eventually went on to other things, like teaching and
nursing. But it is kind of comforting to know that, had they not been
successful at these occupations, they could have put the skills of
childhood to good use, even as adults. They could have, that is, if they
lived in Haiti. In Haiti, grown people make mud cookies. But, unlike my
younger siblings and me, eating them isn't a matter of pretending. The
cookies, made of a soft clay mixed with salt, water and shortening, are
the way impoverished Haitians stave off hunger pains when they can't
afford real food. It's a story that almost beggars belief.
Haiti is undoubtedly the poorest country in the Western Hemisphere.
Unlike many third world countries that have at least held their own,
Haiti's per capita GDP is far smaller than it was 30 years ago. Yet, the
country of eight million is home to a tiny elite, a few thousand
families that are tremendously wealthy, and control the Haitian economy.
This elite shops in Miami, sends its children to Europe to be educated,
and lives in a world completely unlike the 80 percent of Haitians who
live in grinding poverty.
Haiti's poverty is no accident however. It is partly due to years of
military dictatorships that were supported by the U.S., and partly due
to "structural adjustments" that the World Bank forced upon the country
as a precondition to receiving aid. The Bank's economic plan for Haiti
included privatizing key infrastructure and entrusting the delivery of
education, health, family planning, and water supply and sanitation to
private corporations. This was supposed to stimulate the Haitian economy
and bring investment into the country. Never mind that developed
countries generally wouldn't dream of turning these services over to
for-profit enterprises.
As part of this structural change, Haiti opened its border to imports of
food. The resulting flood of cheap food drove local farmers out of
business and reduced local food production. Once a rice exporter, Haiti
now relies on imports for over 80 percent of rice consumption. With food
prices rising around the world this year, imported food is no longer so
cheap. The $2 a day earned by someone lucky enough to have a job in
Haiti will buy only a couple cups of rice.
Canadian farmers are well aware of the benefits for us of trade
agreements that lower tariff barriers. We have spent years watching the
world trade talks, with their improbable promise of prosperity for all,
flounder over this issue. What we don't like to think about are the
effects trade liberalization might have on farmers in other countries.
The example of Haiti, the most "open" country in the region, is far from
unusual. With our superior technology and government subsidies, rich
countries can often insert their farm production into countries that
can't possibly compete. The result for the poor country's food
sovereignty and agriculture sector can be devastating.
Farmers in Canada have been an unhappy lot for decades. Current grain
prices portend potential for a change to their circumstances, but some
of the current upturn in prices is being bought at the expense of
farmers elsewhere. We should remember that when our politicians push
freer trade as the answer to our problems.
(c) Paul Beingessner
When I was a kid, my two older sisters were experts at making mud pies.
In fact, their expertise went far beyond the lowly mud pie. They made
mud cookies, mud cakes, mud vegetables and even mud mashed potatoes.
After careful shaping and drying in the sun, they looked good enough to
eat. Which we did, sort of. Part of getting into the game, and being
allowed to be there at all, was to play along with the fantasy,
pretending to nibble at the food, while exclaiming over the skill of the
cooks.
My sisters eventually went on to other things, like teaching and
nursing. But it is kind of comforting to know that, had they not been
successful at these occupations, they could have put the skills of
childhood to good use, even as adults. They could have, that is, if they
lived in Haiti. In Haiti, grown people make mud cookies. But, unlike my
younger siblings and me, eating them isn't a matter of pretending. The
cookies, made of a soft clay mixed with salt, water and shortening, are
the way impoverished Haitians stave off hunger pains when they can't
afford real food. It's a story that almost beggars belief.
Haiti is undoubtedly the poorest country in the Western Hemisphere.
Unlike many third world countries that have at least held their own,
Haiti's per capita GDP is far smaller than it was 30 years ago. Yet, the
country of eight million is home to a tiny elite, a few thousand
families that are tremendously wealthy, and control the Haitian economy.
This elite shops in Miami, sends its children to Europe to be educated,
and lives in a world completely unlike the 80 percent of Haitians who
live in grinding poverty.
Haiti's poverty is no accident however. It is partly due to years of
military dictatorships that were supported by the U.S., and partly due
to "structural adjustments" that the World Bank forced upon the country
as a precondition to receiving aid. The Bank's economic plan for Haiti
included privatizing key infrastructure and entrusting the delivery of
education, health, family planning, and water supply and sanitation to
private corporations. This was supposed to stimulate the Haitian economy
and bring investment into the country. Never mind that developed
countries generally wouldn't dream of turning these services over to
for-profit enterprises.
As part of this structural change, Haiti opened its border to imports of
food. The resulting flood of cheap food drove local farmers out of
business and reduced local food production. Once a rice exporter, Haiti
now relies on imports for over 80 percent of rice consumption. With food
prices rising around the world this year, imported food is no longer so
cheap. The $2 a day earned by someone lucky enough to have a job in
Haiti will buy only a couple cups of rice.
Canadian farmers are well aware of the benefits for us of trade
agreements that lower tariff barriers. We have spent years watching the
world trade talks, with their improbable promise of prosperity for all,
flounder over this issue. What we don't like to think about are the
effects trade liberalization might have on farmers in other countries.
The example of Haiti, the most "open" country in the region, is far from
unusual. With our superior technology and government subsidies, rich
countries can often insert their farm production into countries that
can't possibly compete. The result for the poor country's food
sovereignty and agriculture sector can be devastating.
Farmers in Canada have been an unhappy lot for decades. Current grain
prices portend potential for a change to their circumstances, but some
of the current upturn in prices is being bought at the expense of
farmers elsewhere. We should remember that when our politicians push
freer trade as the answer to our problems.
(c) Paul Beingessner
Viterra Takes a Page from Monsanto
Column # 669 12/05/08
While I don't expect to get dragged through the court system anytime
soon, I did get an inkling last week of how Percy Schmeiser must have
felt when he got that first letter from Monsanto. Mine came in the form
of a letter from Viterra, that amalgam of the once-farmer-owned prairie
grain companies. It began politely enough, thanking me for my business,
but soon turned ugly. Viterra, it seems, is about to become the Monsanto
of durum.
Monsanto, of course, is famous for suing farmers it believes have
infringed on its patent over the Roundup Ready gene. Percy Schmeiser is
likely the best known farmer to reap Monsanto's wrath, at least in
Canada, but he if far from the only one. Monsanto has hounded thousands
of farmers who it claims have grown Roundup Ready varieties of several
crops without paying the royalty the company demands. Some have ended up
in jail, many in financial ruin. Few had the nerve to defend themselves
to the extent that Percy did.
While Viterra doesn't own any genes related to durum, it does have
control over a couple of varieties - Navigator and Commander. Viterra
controls the production, sale and handling of these varieties. If you
want to grow them, you have to buy registered seed each year from
Viterra. You have to sell all your production to Viterra. And you have
to buy crop inputs, usually a certain dollar amount from Viterra. If
your crop is ruined by weather, you have to account to Viterra for how
you have disposed of the production.
Viterra, it appears, believes that farmers are not following the rules
with its durum varieties. The letter was to remind me of my "contractual
obligations under these Identity Preserved (IP) production contracts."
While Viterra is confident most farmers are following the terms of these
contracts, "regrettably, some are not". Then comes the threat, "Viterra
is considering all remedies, including legal action, to enforce these
rights and protect our IP programs."
Viterra, according to one source in the grain industry, is convinced a
great deal of Navigator durum is being grown outside its contracts, and
delivered to elevators as common durum. It is determined to get this
breach of its rules under control.
While the letter from Viterra made me feel real special, I suspect an
awful lot of farmers have received the same. Personally, I'm not sure
why I was on Viterra's list, since I haven't done any business of any
kind with the company for about a decade. Nor have I ever grown
Navigator or Commander durum.
So why do people grow these varieties, despite the downside of having to
buy new seed each year and being unable to access competitive buyers for
their production? Perhaps the biggest incentive is the guarantee that
the CWB will take all the Navigator that is produced under contract each
year. Navigator has one feature that is relatively unique among durums
at this time. It has a brighter yellow pigment in the seed and hence
produces brighter yellow pasta. There is a niche market for a small
amount of this durum, and Viterra limits production to this amount by
limiting the contracts it lets out.
Commander durum has less to commend it. Yields are fairly high relative
to other varieties, and like Navigator, Commander has stronger gluten
than other durums. However, Commander has the very undesirable habit of
accumulating cadmium in its seed. Cadmium is a toxic heavy metal that
has become a source of concern to consumers of durum. The CWB limits
contracts for Commander in certain parts of the prairies where cadmium
accumulation is especially problematic. Like Navigator, Commander also
limits what growers can do with their production. Many farmers don't see
the closed loop system as a desirable thing. There is some evidence to
indicate that farmers whose marketing options are restricted by
contracts receive lower trucking premiums and poorer grades when they
sell their grain.
Fortunately, those wanting to grow stronger gluten durum have an
alternative. Strongfield durum, developed by the same Agriculture Canada
scientists who developed Navigator and Commander, is a strong gluten
durum with superior milling qualities. It has better yields that
Navigator, and, with it being licensed to SeCan, farmers are able to
keep their own seed for replanting, and are not nearly so restricted in
marketing options.
The CWB has been anxious to get Strongfield into greater production (it
occupied 43% durum acres in Saskatchewan last year) in order to improve
the quality of the durum it sells. The CWB has also generally required
companies that want contracts for Strongfield to allow farmers to
replant their own seed.
Viterra's aggressive measures to protect its control over Navigator will
not sit well with many farmers. No one likes to think that the future of
grain production lies in closed loop contracts that limit a farmer's
access to both markets and farm supplies. The huge growth in Strongfield
acres indicates just that. Rumour has it that Viterra hasn't limited its
threats to farmers. Other grain companies have been told that they might
be held liable if they buy Navigator durum. At least one company
responded by saying that if Viterra allowed Navigator to contaminate its
elevators, Viterra would be held responsible.
(c) Paul Beingessner
While I don't expect to get dragged through the court system anytime
soon, I did get an inkling last week of how Percy Schmeiser must have
felt when he got that first letter from Monsanto. Mine came in the form
of a letter from Viterra, that amalgam of the once-farmer-owned prairie
grain companies. It began politely enough, thanking me for my business,
but soon turned ugly. Viterra, it seems, is about to become the Monsanto
of durum.
Monsanto, of course, is famous for suing farmers it believes have
infringed on its patent over the Roundup Ready gene. Percy Schmeiser is
likely the best known farmer to reap Monsanto's wrath, at least in
Canada, but he if far from the only one. Monsanto has hounded thousands
of farmers who it claims have grown Roundup Ready varieties of several
crops without paying the royalty the company demands. Some have ended up
in jail, many in financial ruin. Few had the nerve to defend themselves
to the extent that Percy did.
While Viterra doesn't own any genes related to durum, it does have
control over a couple of varieties - Navigator and Commander. Viterra
controls the production, sale and handling of these varieties. If you
want to grow them, you have to buy registered seed each year from
Viterra. You have to sell all your production to Viterra. And you have
to buy crop inputs, usually a certain dollar amount from Viterra. If
your crop is ruined by weather, you have to account to Viterra for how
you have disposed of the production.
Viterra, it appears, believes that farmers are not following the rules
with its durum varieties. The letter was to remind me of my "contractual
obligations under these Identity Preserved (IP) production contracts."
While Viterra is confident most farmers are following the terms of these
contracts, "regrettably, some are not". Then comes the threat, "Viterra
is considering all remedies, including legal action, to enforce these
rights and protect our IP programs."
Viterra, according to one source in the grain industry, is convinced a
great deal of Navigator durum is being grown outside its contracts, and
delivered to elevators as common durum. It is determined to get this
breach of its rules under control.
While the letter from Viterra made me feel real special, I suspect an
awful lot of farmers have received the same. Personally, I'm not sure
why I was on Viterra's list, since I haven't done any business of any
kind with the company for about a decade. Nor have I ever grown
Navigator or Commander durum.
So why do people grow these varieties, despite the downside of having to
buy new seed each year and being unable to access competitive buyers for
their production? Perhaps the biggest incentive is the guarantee that
the CWB will take all the Navigator that is produced under contract each
year. Navigator has one feature that is relatively unique among durums
at this time. It has a brighter yellow pigment in the seed and hence
produces brighter yellow pasta. There is a niche market for a small
amount of this durum, and Viterra limits production to this amount by
limiting the contracts it lets out.
Commander durum has less to commend it. Yields are fairly high relative
to other varieties, and like Navigator, Commander has stronger gluten
than other durums. However, Commander has the very undesirable habit of
accumulating cadmium in its seed. Cadmium is a toxic heavy metal that
has become a source of concern to consumers of durum. The CWB limits
contracts for Commander in certain parts of the prairies where cadmium
accumulation is especially problematic. Like Navigator, Commander also
limits what growers can do with their production. Many farmers don't see
the closed loop system as a desirable thing. There is some evidence to
indicate that farmers whose marketing options are restricted by
contracts receive lower trucking premiums and poorer grades when they
sell their grain.
Fortunately, those wanting to grow stronger gluten durum have an
alternative. Strongfield durum, developed by the same Agriculture Canada
scientists who developed Navigator and Commander, is a strong gluten
durum with superior milling qualities. It has better yields that
Navigator, and, with it being licensed to SeCan, farmers are able to
keep their own seed for replanting, and are not nearly so restricted in
marketing options.
The CWB has been anxious to get Strongfield into greater production (it
occupied 43% durum acres in Saskatchewan last year) in order to improve
the quality of the durum it sells. The CWB has also generally required
companies that want contracts for Strongfield to allow farmers to
replant their own seed.
Viterra's aggressive measures to protect its control over Navigator will
not sit well with many farmers. No one likes to think that the future of
grain production lies in closed loop contracts that limit a farmer's
access to both markets and farm supplies. The huge growth in Strongfield
acres indicates just that. Rumour has it that Viterra hasn't limited its
threats to farmers. Other grain companies have been told that they might
be held liable if they buy Navigator durum. At least one company
responded by saying that if Viterra allowed Navigator to contaminate its
elevators, Viterra would be held responsible.
(c) Paul Beingessner
Saskatchewan RMs Take a Beating From Transportation
Column # 668
Although it may seem as if the prairie branch line rail network has been
completely skeletonized by the major railways, the job is not yet truly
complete. CP still has 911 kilometres of track on its Three-Year Plan
for abandonment in the prairie provinces, and CN has 613 kilometres. Nor
does this rule out further abandonments by the major carriers. At least
one major railway has stated that there are still too many grain
elevator points and by extension, too many rail lines.
When the railways seek to abandon track, there is a formal process laid
out in the Canada Transportation Act. At one time, prior to the passage
of this act, the Transportation Agency had to take public interest into
account in deciding whether or not to allow an abandonment. That idea
was vanquished some time ago. The railways merely have to follow a
prescribed procedure, and cannot be prevented from abandoning track, no
matter what the government may think. It isn't exactly what the
country's founding fathers had in mind when they granted the original
railway charters.
The only defence of the public interest left in federal rail legislation
is the stipulation that a railway must offer a line for sale to various
levels of government before it can rip it out of the ground. Of course,
this wouldn't mean much if the railway could charge whatever price it
wanted. The rules say that the price will be the net salvage value of
the track - the amount of money the railway would get by selling the
materials less the cost of tearing out those materials. If the parties
can't agree on that amount, the Canadian Transportation Agency (CTA)
will decide.
Until recently, the Agency has been fairly reasonable in these
determinations. Neither party usually got what it wanted completely. But
two recent net salvage value determinations on Saskatchewan branch lines
seem to indicate the tide has turned in the railways' favour. The new
Members of the Agency, freshly appointed by the Harper government, gave
the railways a huge and questionable bonus in these recent rulings.
The bonus revolves around a section of the Canada Transportation Act
that requires the railways to pay to municipal governments, on
abandonment, an amount equal to $30,000 per mile, for each mile of rail
line that runs through the municipality. This provision only applies to
grain dependent branch lines in western Canada. The rationale for this
was to compensate municipalities for road costs they would incur when
rail service ended.
It would seem this condition imposes quite an obligation on the
railways. Prior to the recent run-up in commodity markets, including
steel, a railway would likely have ended up in a negative position when
it abandoned track. This makes it all the more odd that this provision
in the act was, if memory serves me correctly, first proposed by CP.
The fact is, CP was quite clever in suggesting it. Municipalities have
been fighting with each other ever since the act came into effect. While
one municipality may want to buy the track to operate a short line,
another will see only the short-term prospect of hundreds of thousands
of dollars of revenue.
Given this provision, it would seem logical that the net value of the
track would include consideration for the $30,000 a mile. It the railway
abandons the track, it can sell the materials but must take the payment
to municipalities out of that money. There is no way around this.
Salvaging the track includes a compensation cost to the municipalities.
At least that is what seems logical. Unfortunately for farmers on the
Radville and Bromhead branch lines, Harper's appointees to the Agency
don't appear to see it that way. If CP sells to the RM's in question, it
gets to have its cake and eat it too. The RMs pay the full price and
lose the benefit of $30,000 per mile. And if they want to start a short
line, they are still at the mercy of CP as to all and any conditions the
line would run under.
To top it off, the Agency also ruled against the RMs where their
reclamation bylaws were concerned. Having seen the condition of many
abandoned branch lines, some municipalities enacted bylaws requiring the
railways to clean up abandoned railway sites. The RMs in this case felt
the amount of such a clean up should be deducted from the salvage value.
Again the Agency ruled in CP's favour on this.
The resulting purchase prices for these branch lines are exceedingly
high. It is possible that the Agency's rulings might fit the letter of
the law as laid out in the act, but they violate any sense of natural
justice.
There is one last recourse in this case. The rulings can be appealed to
the federal court of Canada. A successful appeal would have implications
far beyond the two branch lines in question, and extend to the other
1300 kilometres on the railways' plans for discontinuance.
Given the cost of such an appeal, and the wide implications, the
government of Saskatchewan should consider funding it. For a province
swimming in oil money, it would be a small amount. For some beleaguered
RMs, it would be a godsend.
(c) Paul Beingessner
Although it may seem as if the prairie branch line rail network has been
completely skeletonized by the major railways, the job is not yet truly
complete. CP still has 911 kilometres of track on its Three-Year Plan
for abandonment in the prairie provinces, and CN has 613 kilometres. Nor
does this rule out further abandonments by the major carriers. At least
one major railway has stated that there are still too many grain
elevator points and by extension, too many rail lines.
When the railways seek to abandon track, there is a formal process laid
out in the Canada Transportation Act. At one time, prior to the passage
of this act, the Transportation Agency had to take public interest into
account in deciding whether or not to allow an abandonment. That idea
was vanquished some time ago. The railways merely have to follow a
prescribed procedure, and cannot be prevented from abandoning track, no
matter what the government may think. It isn't exactly what the
country's founding fathers had in mind when they granted the original
railway charters.
The only defence of the public interest left in federal rail legislation
is the stipulation that a railway must offer a line for sale to various
levels of government before it can rip it out of the ground. Of course,
this wouldn't mean much if the railway could charge whatever price it
wanted. The rules say that the price will be the net salvage value of
the track - the amount of money the railway would get by selling the
materials less the cost of tearing out those materials. If the parties
can't agree on that amount, the Canadian Transportation Agency (CTA)
will decide.
Until recently, the Agency has been fairly reasonable in these
determinations. Neither party usually got what it wanted completely. But
two recent net salvage value determinations on Saskatchewan branch lines
seem to indicate the tide has turned in the railways' favour. The new
Members of the Agency, freshly appointed by the Harper government, gave
the railways a huge and questionable bonus in these recent rulings.
The bonus revolves around a section of the Canada Transportation Act
that requires the railways to pay to municipal governments, on
abandonment, an amount equal to $30,000 per mile, for each mile of rail
line that runs through the municipality. This provision only applies to
grain dependent branch lines in western Canada. The rationale for this
was to compensate municipalities for road costs they would incur when
rail service ended.
It would seem this condition imposes quite an obligation on the
railways. Prior to the recent run-up in commodity markets, including
steel, a railway would likely have ended up in a negative position when
it abandoned track. This makes it all the more odd that this provision
in the act was, if memory serves me correctly, first proposed by CP.
The fact is, CP was quite clever in suggesting it. Municipalities have
been fighting with each other ever since the act came into effect. While
one municipality may want to buy the track to operate a short line,
another will see only the short-term prospect of hundreds of thousands
of dollars of revenue.
Given this provision, it would seem logical that the net value of the
track would include consideration for the $30,000 a mile. It the railway
abandons the track, it can sell the materials but must take the payment
to municipalities out of that money. There is no way around this.
Salvaging the track includes a compensation cost to the municipalities.
At least that is what seems logical. Unfortunately for farmers on the
Radville and Bromhead branch lines, Harper's appointees to the Agency
don't appear to see it that way. If CP sells to the RM's in question, it
gets to have its cake and eat it too. The RMs pay the full price and
lose the benefit of $30,000 per mile. And if they want to start a short
line, they are still at the mercy of CP as to all and any conditions the
line would run under.
To top it off, the Agency also ruled against the RMs where their
reclamation bylaws were concerned. Having seen the condition of many
abandoned branch lines, some municipalities enacted bylaws requiring the
railways to clean up abandoned railway sites. The RMs in this case felt
the amount of such a clean up should be deducted from the salvage value.
Again the Agency ruled in CP's favour on this.
The resulting purchase prices for these branch lines are exceedingly
high. It is possible that the Agency's rulings might fit the letter of
the law as laid out in the act, but they violate any sense of natural
justice.
There is one last recourse in this case. The rulings can be appealed to
the federal court of Canada. A successful appeal would have implications
far beyond the two branch lines in question, and extend to the other
1300 kilometres on the railways' plans for discontinuance.
Given the cost of such an appeal, and the wide implications, the
government of Saskatchewan should consider funding it. For a province
swimming in oil money, it would be a small amount. For some beleaguered
RMs, it would be a godsend.
(c) Paul Beingessner
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