Greenspan was "Partially Wrong"

Column #692 October 26/08

It was heartwarming, last week, to see Alan Greenspan, the former head
of the Federal Reserve in the United States, admitting he was wrong.
The Federal Reserve is the American equivalent of the Bank of Canada.
Greenspan was its master through four American presidents, over a span
of 19 years. The trademark of Greenspan's tenure was his unflinching
belief that free markets, and the freer the better, would ensure the
U.S.'s fiscal health and world dominance in things financial.

Not that Greenspan didn't believe in regulation. He did, but his
version was called self-regulation. He believed that the financial
industry was capable of self-regulating since it would never do
anything that would adversely affect shareholder and company value.
The banks were full of wise people, like him, who would know when to
say giddyup and when to say whoa.

Unfortunately it turned out that the banks were full of greedy people,
not wise ones, who took massive risks with other people's money so
they could enrich themselves. And Alan Greenspan, the
once-unassailable demi-god whose decisions affected the lives of
hundreds of millions of people now is in a "state of shocked
disbelief" as he told the U.S. Congress.

Thanks Al. I'm sure all the newly-homeless in the U.S. can take that
one to the bank. And they, of course, are only a fraction of the
people across the globe in rich and poor nations whose lives are being
shattered by the collapse of markets, which began with the financial
meltdown.

Sometimes it astonishes me, how yesterday's hero can become today's
goat, and yesterday's brilliant idea can become today's laughingstock.
Greenspan's brilliant idea was to allow the banking sector to do
anything it pleased. Unfortunately, no one is laughing today, and
conservatives in the U.S. who decried the idea of restraining markets
are now nationalizing banks and screaming for rules to be put in
place. It would be hilarious if it weren't so tragic.

It bears a striking resemblance to the brilliant idea in Canada that
food manufacturing companies, like Maple Leaf, would be amply able to
regulate themselves, while government inspectors were relegated to
inspecting the reports turned out by the companies. Unlike Greenspan's
wholehearted confession that he may have been "partially wrong",
Canada's food regulators have neither accepted responsibility not
indicated they would make any changes. Can we look forward to the day
when enough people have died that the government decides cutting
inspectors and kicking them to the back rooms was at least "partially
wrong"?

Similarly, Stephen Harper is telling farmers his brilliant idea - that
they can have an open market and a strong Canadian Wheat Board at the
same time. The nonsense of the strong CWB as a grain company with no
assets, relying on its competitors to handle its grain is apparently
lost on him.

So when the dust has all settled, and when Steve finally gets his way,
and when the CWB is gone and the producer car loading facilities that
rely on the CWB are gone, and when the short line railways that rely
on the producer car loading facilities are gone, and when farmers'
investments in these are gone, who will finally do the Greenspan-like
thing and admit that they may have been "partially wrong"?

Not, I think, Mr. Harper. Farmers, like homeless ex-homeowners, will
wear the results of our blind faith in the markets. And by then, it
will be far too late for any good to come from admitting they may have
been partially wrong.

© Paul Beingessner beingessner@sasktel.net

Begging

October 21, 2008

Dear friends,

I have a tough time with a letter like this. Beingessners are so
miserably self-sufficient and independent we hate to ask for help from
anyone. But, desperate times demand desperate measures, I guess, so I
will swallow my pride.

I am running in the current Canadian Wheat Board director election.
The CWB is governed by a 15 person board of directors. Five are
appointed by the government and ten elected by farmers. The
Conservative government has appointed directors who want to get rid of
the CWB's single desk for selling wheat and barley. This move will
effectively end the CWB as an effective tool for farmers. Without the
single desk, the CWB becomes an insignificant grain broker, with no
assets, and dependent on its competitors to give it terminal space.

Farmers have always voted overwhelmingly for directors who support the
CWB. Currently, eight out of ten are strong supporters. That also
means that the anti-CWB side only needs to win one more position,
because of the five government appointees to have a majority on the
board. It is important to know that of the five districts involved in
elections, only two have pro-CWB incumbents. In the other three
districts, the incumbents were not able to run for another term due to
the limits set in the CWB act. Hence, the CWB is at increased risk. We
can't afford to lose any of these.

My district is represented by Rod Flaman from Edenwold. Rod has
supported the CWB and has been a good director. So why am I running?

Several reasons:

a.. Rod recently ran for the Liberals in the federal election. This
may have hurt his chances for re-election to the CWB. We need strong
candidates in case he is not electable. b.. Since the ballot is
preferential, having multiple candidates who support the single desk
will increase the voter turnout and increase the chances of pro-CWB
candidates. c.. Ian McCreary is no longer eligible to run in
district 6. Ian was the board's expert in transportation. I have
been encouraged by people who feel my expertise in this area would
be important to the board.

So, now to the tough part. Running a campaign costs money. Individual
candidates are allowed to spend $15,000 according to CWB election
rules. I know that some of you have been involved in other recent
election campaigns, and I sure don't expect you to contribute to mine
as well. Others on this list are not involved in agriculture, and may
not see much point in being involved in this election. But for the
rest of you, if you are able, and if the CWB matters to you, your
support would be much appreciated.

Contributions can be mailed to Paul Beingessner, Box 74 Truax,
Saskatchewan. S0H 4A0

Cheques should be made out to "Paul Beingessner CWB Election".

Many thanks,

Paul

Bush League Elections

Column # 691 20/10/08

The scene at my local polling station in last week's federal election
would have been comical if it hadn't been so serious. In this rural
area, where everyone knows everyone else, voting is usually a pretty
casual affair. You go in, wave at everyone, get you ballot while the
scrutineers and poll clerks mark your name off the list, and vote. You
wave again and leave.

This time, on my way in, I stopped to chat with a 90-year old lady who
had spent all of her 9 decades in the community. She was on her way
out, because she had forgotten her photo i.d., and wasn't allowed to
vote, until she tottered back home to get it.

When I approached the table where the Returning Officer sat, we
greeted each other by name and made small talk for a few seconds. Then
she asked to see my driver's license, complete with photo, telling me
she had to see both sides, to ensure it was current. I handed it over,
laughed, did my civic duty and left. But I left with a funny feeling.
Yes, there was something ludicrous about having to show photo i.d. to
people I've known all my life. And I wondered how this foolishness
came about. I've lived long enough to know nothing in politics is by
accident.

A day or two after the election, stories began to leak out about
people unable to vote because they didn't have photo i.d. These would
typically include the elderly, who might no longer drive, and the
poor, who don't own cars. My wife worked for a time in a remote
northern community. Only a few people there had driver's licenses.
There were no roads out!

I began to wonder why anyone would want to restrict people from
voting. Shows how naïve I am!

Voter manipulation likely reached its zenith in North American in the
2004 American presidential election. It featured Republican George W.
Bush seeking re-election to a second term against the tall,
sepulchral-looking Democrat John Kerry. Polls before the election
declared that Kerry would easily end the Bush dynasty. Exit polls,
those taken as people leave voting booths, showed a virtual landslide
for Kerry. But Bush won! While the media never got too interested in
the implications of this, Robert Kennedy Jr. did. He wrote a book
detailing how Republicans stole the election.

One of the main ways to steal an election is to disenfranchise people
likely to vote against you. The American federal election system is
rife with opportunity to do this. Rather than one body that sets the
rules and oversees the election, the voting system in the U.S. is
determined by individual states, municipalities, or cities. As a
result, the party that controls the state, city or municipality can
set its own rules for who gets to vote.

In American presidential elections, the overall vote isn't important.
What matters is who wins each state, and the votes that state has in
the Electoral College. In the 2004 election, key states showed
extensive signs of vote rigging. Areas that usually voted democrat
weren't given enough voting machines. Voters were challenged if their
address or name on the voters list failed to match their i.d. in even
the tiniest way. Some polls showed more votes cast by far than
registered voters. All these "errors" favored George Bush.

Paul Weyrich, an architect of the modern Republican Party, said in
1980 before he helped Ronald Regan win election, "I don't want
everybody to vote. Our leverage goes up . as the voting populace goes
down". Small wonder that disenfranchised voters tend to include large
numbers of Hispanics and Blacks.

It is all eerily similar to the games that Steven Harper has played
with the voters list for the CWB election. In 2006, his government
removed 16,000 names from the voters list, in "an attempt to clean it
up". The rule was that anyone who hadn't sold grain in the last 15
months wasn't entitled to vote. In some areas, crops in 2005 were very
poor. Some would have had little, if any grain to sell. 2006 brought
better crops, but many farmers hadn't sold anything by that early date
in the crop year when the voters list is set.

In 2008, Harper tried to change the act to restrict voting to those
who sold at least 120 tonnes of CWB grains in the last crop year. That
bill died on the order paper. The old rule, however, remains in place,
with a new twist. If you do not get a ballot, you can still vote if
you grew any of the six major grains, but only if the land where you
grew them is not listed on a permit book. This has created the bizarre
situation where you can vote if you grew 20 acres of flax, and had no
CWB permit book, but you couldn't vote if you grew 1,000 acres of
durum, had a permit book and hadn't sold any last year.

Equally strange, and it has always been like this, if you have
multiple permit books you can vote multiple times. A fellow I know has
six or seven permit books. He has one, his wife has one, they have one
together, the corporation has one, the son has one, etc. He likes to
have lots of delivery opportunity early in the crop year. He gets
seven votes, I get one.

Harper's shenanigans are currently the subject of a lawsuit by a group
of farmers. I am one of them. When I signed on to the lawsuit, I was
concerned about continued attempts to get around the CWB act. What I
didn't realize at the time was that the government was simply using
one of George Bush's tactics - the way to win the election is to
control who gets to vote. You simply disenfranchise people likely to
vote against you.

© Paul Beingessner beingessner@sasktel.net

Transportation Agency Demand Performance Benchmarks of CN

Column # 690 13/10/08

For years now, CN has been tightening the noose around the necks of
small shippers in the grain industry. In re-shaping the grain
transportation system to meet its needs, CN began with incentive rates
some years ago. These refunded a portion of the freight rate when a
grain company loaded blocks of 18, 25, 50 or 100 cars from a single
origin to a single destination. Incentive rates gave an obvious
advantage to large elevators and soon caused a major change in the
prairie landscape. Large concrete elevators sprang up on the horizon
while the small wooden sentinels were rapidly demolished.

As the system consolidated, so did incentive rates. The 18-car
incentive went quickly, followed by the 25-car rebate. This
effectively ended the day of the wooden elevator, since almost none of
these could spot and load 50 cars at a time. The 50 car incentive
declined in value and the advantage went to elevators that could load
100 cars in 24 hours, as these incentive rates increased.

Large incentive rates gave a competitive advantage to elevators that
could attain them. They provided revenue that could be passed back to
farmers in the form of trucking subsidies, thereby luring grain to
these elevators. However, smaller elevators still played on a somewhat
level playing field where car supply was concerned. And the
availability of space at an elevator is often as important in
determining where a farmer will haul as the trucking incentive that is
available.

Smaller elevators lost this advantage when CN unilaterally implemented
its car ordering system in 2000. This replaced the collaborative
approach to car allocation that had existed for decades. Under this
previous system, the grain companies, railways, CWB and farmers all
had some input into the allocation of cars on a weekly basis.

CN and CP unilaterally ended this allocation mechanism, and
implemented their own systems for distributing cars among the
competing interests that wanted them. Much of the new allocation was
done on a bid system. As a general rule, the larger the elevator, the
easier it was to obtain cars. And having a network of large elevator
made it easier than having a single one, as is the case for the
independent "inland terminals" found mainly in Saskatchewan.

CN continued its relentless march in this direction. Small shippers
found it more and more difficult to get enough cars, while large
shippers gained both from increased car supply and incentive rebates.

The most obvious shipper recourse against situations like this is to
take a complaint against the railway to the Canadian Transportation
Agency. Shippers, especially small ones, are often reluctant to do
this, since the cost is high and, more importantly, they fear
retaliation from the railway and even worse service as a result. Large
shippers like Viterra and Pioneer were relatively happy with CN's
allocation system. They have enough large terminals that they were at
an advantage in obtaining cars. Thus, when Great Northern Grain lodged
a complaint against CN's 100-car shipper program, the big grain
companies were there arguing on CN's side.

A further reason shippers are reluctant to appeal to the CTA is
because even if they win a judgement, there is no guarantee it will
result in any change in behavior on the part of the railway. Naber
Seeds of Melfort found this out the hard way. Naber filed successive
level of service complaints in 1998, 2000 and 2001. It "won" each
complaint but was out of business shortly after the final complaint.

In the first Naber complaint, the Agency ruled that CN had failed to
provide adequate service, but it refused to grant any specific relief
other than telling Naber and CN to negotiate a service agreement.

In the second case, the Agency again "ordered" CN to negotiate a
service plan with Naber but refused to be more specific than to say it
would monitor the situation.

The third ruling against CN, in 2001, was more specific. It required
certain numbers of cars to be supplied and specified some of the
conditions of service. It may have been years too late, as Naber was
soon gone.

Following Naber's complaints, there was a period of six years with no
formal level of service complaints being filed. In March 2007, Great
Northern Grain of Nampa, Alberta filed and won the aforementioned
complaint. In this ruling, the Agency was much more specific than it
had been previously, requiring delivery of certain numbers of cars on
a specific schedule.

In September 2007, the CWB and five grain companies filed level of
service complaints against CN. The final rulings on these complaints
came out September 25. While the CWB and Providence Grain were not
successful, North East Terminal, North West Terminal, Paterson Grain
and Parrish and Heimbecker were. These rulings were unique in that the
Agency set specific performance benchmarks for the railway to meet.

It is clear that the Agency has finally realized it needs to be
specific in its rulings - specific enough to actually make a
difference to shippers. Shippers should be heartened by this. Many of
them believe that CN's service has declined year after year as it
continually changes its car allocation programs to the detriment of
smaller grain companies. It appears the Agency now may be prepared to
yield the big stick it should have picked up long ago.

© Paul Beingessner beingessner@sasktel.net

Conservative Have No Platform, Farmers Don't Care

Column # 689 05/10/08

A friend mentioned to me the other day that the Liberals had promised
in their campaign platform that if elected they would conduct a
costing review of the freight rates western farmers pay to ship grain.

Since the end of the Crow benefit, freight rates have continued to be
regulated, but they have increased steadily, more than the railways'
cost to move grain. This is because each year they are adjusted to
account for increases in inflation but not reduced for railway
efficiencies. These include the vast reduction in grain shipping
points and technological improvements that have lowered railway costs.
Farm groups have asked for a recosting (the last one was done in 1992)
but the Conservatives, and the Liberals before, ignored these
requests. Estimates are that doing a costing review would save prairie
farmers about 100 million dollars a year. This is hardly chump change.

Apparently someone in Dion's campaign team has managed to convince the
party that this is a good idea. The platform also says a Liberal
government would put a halt to rail line abandonment, strengthen
safety nets and do a host of other things. It got me wondering what
the Conservative platform was promising to farmers, so I went to the
internet and booted up the Conservative party website. It was then I
found out, like other Canadians, that the Conservatives have no
platform, or at least none that they are giving out publicly. Rather,
their website focuses a lot, as has their campaign, on criticizing the
Liberal leader.

I also checked out the NDP platform. They have a section on
agriculture, though less detailed than the Liberals.

In the past, prairie farmers have voted overwhelmingly for
Conservative candidates. A recent poll cited in the Western Producer
indicated this would continue this election. I have to admit it leaves
me a bit baffled. While the Conservative government hasn't done
farmers a lot of harm yet (it hasn't managed to destroy the CWB) it
has done them very little good. Safety net programs have been changed
in name but not really improved. Money is still short for programs
like those that assist farmers to build dugouts and provide emergency
water supplies in drought affected areas. More liberalized trade,
which the Conservatives put so much stock in, died with the end of the
Doha round. Even gun control, a favorite gripe among prairie
residents, hasn't changed, despite Conservative fervor on this issue.

So with grain prices falling like a stone in the wake of the U.S.
financial crisis (soon to be the world economic crisis) what do the
Conservatives have to offer farmers? Well, if you go by their
platform, apparently nothing.

The Conservative's failure to post a platform is rooted in their
belief that Stephen Harper's sterling personality is the key to
electoral victory. Their failure to mention agriculture in the
campaign is also rooted in their conviction that prairie farmers will
elect Conservatives no matter what they do to them or how little they
do for them. Harper's attitude to farmers is, as he told those who
opposed his moves to emasculate the CWB, that those who oppose him
will be walked over.

The Progressive Conservative party once paid a lot of attention to
prairie agriculture. Changes to the transportation act, conceived
while Don Mazankowski was Transport Minister, paved the way for short
line railways. Aid to agriculture flowed freely while Maz was in
Ottawa.

Maybe farmers still remember that and have the same expectations from
today's Conservative party. The evidence to support this belief is
scant. The ideologues that run the party today have little in common
with the PC party of that time. Nor is Gerry Ritz, Saskatchewan's
contribution to the federal cabinet, on the same level as a
Mazankowski. Ritz is a bully, and not a very astute one at that. His
disappearing act (the Saskatoon Star Phoenix reported that even Harper
said he doesn't know where Ritz is) should earn the contempt of
voters. However, they will likely elect him, despite his dismal
performance.

Unfortunately, that doesn't say much for us as farmers. We could do
better.

© Paul Beingessner beingessner@sasktel.net