The View From Out Here

Back Into the Fray

2010-11-24T15:59:00.004-06:00

It is some time since I posted to this site. I had changed it to an archive of Prairie journalist Paul Beingessner writings because he said what I believed only better. Also I am inherently lazy. I was also dispirited by what was happening in Canada and the world. I won't say that I will be diligent in my postings but for now am aiming at one post a week.

Little Muddy

Is The Bye-Election in Dauphin-Swan River-Marquette a CP shoo-in ?

2010-11-24T15:56:00.003-06:00

Inky Mark the former MP for Dauphin-Swan River-Marquete was a long-time maverick in the CP, but a much-loved and very clever politician in the riding. He had joined the ginger group of Reformers who quit the party and joined the CPCs in protest of Stockwell Day's policies.
The ginger group rejoined the party after the reform alliance was formed. Among other things he supported the Wheat Board during Harper's vicious attacks on it's right to exist. Following that Inky was delegated to the back benches. Harper runs a tight ship. One could call it dictatorial. I believe Harper, as he had with many other MPs, put pressure on Inky to quit. The alternative being the possibility of one of the bagfull of nasty King Steven's dirty tricks.

Inky resigned, figuring he could return to his Dauphin base as Mayor. He considered it a safe haven as he had been a very popular mayor. On leaving he gave a subtle dig at the party. See parts of his National Post interview here http://www.uglychinesecanadian.com/?p=489 and here http://www.theglobeandmail.com/news/politics/ex-tory-mp-calls-nominations-undemocratic/article1783759/ ( the comments are also interesting).

The riding nominations were called for in the summer of this year. There was not the usual process of mailing out a nomination kit which one would imagine would give a closing date for nominations. Inky's preferred candidate Wayne Matheson stated that early on he was told by the national office to hold off putting himself forward until the bye-election was called. One would imagine that other potential candidates were also told this.
The riding nomination committee was not formed until the day before nominations closed in late summer, the busiest time of year for farmers. The potential candidates were supposedly informed by an automated telephone service. There was only one acclaimed candidate, Robert Sopuck, altho others had expressed interest in running.

Inky protested to many former PC MPs about the the nomination process, without getting any support. The fix was on and and none of them dared oppose Harper and the national council. The President of the riding Brian Chita launched an appeal of the process on behalf of the local Conservative board.and sent a long letter to riding members stating “a process that failed to follow our party's candidate nomination rules, thereby limiting your opportunity to take part in the process.” It was of course rejected by the national council. http://www.theglobeandmail.com/news/politics/ex-tory-mp-calls-nominations-undemocratic/article1783759/

It's interesting to note that Brian Chita, who admittedly ran for mayor of Dauphin in the previous election, ran as a mayoralty candidate against Inky. One would imagine that the riding president of Inkys long-time held riding would have deferred to him in the mayorality contest. One must wonder whether the Harper SS exerted pressure on him to run. Inky lost by 40 votes.

Robert Supock is/was a paid staffer of the Frontier Center for Public policy, a harder-right subsiduary of the Frazer Institute which is funded by many of the large corporations, especially the oil-patch industry.
http://www.sourcewatch.org/index.php?title=Frontier_Centre_for_Public_Policy.
"http://www.desmogblog.com/calgary-foundation-friends-friends-science#comment-form. They also support Tim Ball a noted antienvironmentalist and friend of big oil. http://www.sourcewatch.org/index.php?title=Tim_Ball.

FCPP is an active player in the climate change debunker movement, and likely linked to the "Calgary School" of Harper and many of his advisors, folllowers of the Plutocrat Leo Straus. Strauss was the ideological underpinning for most of the neocons and upper elite of the GW Bush administration. http://evatt.labor.net.au/publications/papers/112.html
http://thetyee.ca/Mediacheck/2005/11/29/HarperBush/ http://www.newyorker.com/archive/2003/05/12/030512fa_fact

Sopuck will certainly not step out of line with Harper's devious policies, nor support The Wheat Board's continuance which impedes Harpers plans to turn the nations agriculture over to big business. Indeed he will urge for policies even more right-wing, such as weakening our Medicare, cutting welfare expenditures, and of course even weaker environmental laws.

I don't buy the common conception that Swan River-Marquette is a PC shoo-in even with the gerrymandering some years back which brought in to the riding the prosperous regions of Neepawa-Minnidosa. We are still, if I remember correctly, the 4th poorest federal riding in Canada and one of the largest. Inky was the glue which held it together for the conservatives. There were Liberal MPs before Inky and even an NDP MP. The riding is also surrounded by provincial NDP ridings and of course the Swan River riding is held by Rosanne Wowchuck the present Treasurer.

There must be many dissaffected Conservatives especially if the electorate is informed on Sopucks affiliations and his real positions. He even has the audacity of presenting himself as an enviromentalist when his main interest there is his hunting background. This guy must be defeated because if he gets elected this gives him credence which will carry over to the next election.

Inky, understandably, is pissed off and is now mobilizing behind the Green Party candidate Kate Storey. This could seriously split the CP support in the south of voters who would never vote NDP. The Liberals are no threat but do reduce CP support.

Denise Harder, the NDP candidate is very credible and competent, a Cupe staffer and chairman of the midmanitoba health authority. She was born in Ste Rose du Lac, but now lives in Portage La Prairie, just outside the riding (which of course the CPers are making much of). Jack and Olivia were supposed to be at a rally in Dauphin today, but the roads out here are virtually impassable because of a blizzard the last few days. This seat is winnable with more support from the NDP National Council. Keep a close eye on this riding. Harper and the CP might be in for a big surprise.

Paul Beingesner Obituary

2009-06-29T19:18:00.002-05:00

PAUL JOSEPH BEINGESSNER of Truax, Saskatchewan, passed away suddenly on June 25, 2009 at the age of 55 years. Paul was born April 26, 1954 in Moose Jaw and spent most of his life on the family farm at Truax. He is predeceased by his father, Herbert, and survived by his mother, Agnes, his wife Faye, his sisters Dolores (Ken), Rita (Bill), Cathy (Lawrence), and Virginia, his children Naomi (Dan), Chris (Brenda), Kate, and their mother Laura, and his sons James (Carolyn), and David. He doted on his grandchildren, Vincent, Norah and Edith. After getting a B.A. (Hon) in Psychology from the University of Regina in 1976, he worked with at-risk youth at the Roy Wilson Centre in Sedley. The patience and compassion he exhibited with these youth characterized all of his interactions with people and animals throughout his life. Returning to the farm full-time in 1981, Paul farmed alongside his father and raised grain, cattle, chickens, turkeys and a formidable army of cats. Never one to sit idly, in addition to farming Paul served as a Saskatchewan Wheat Pool Delegate from 1996 to 1998. He was instrumental in the founding of Saskatchewan's first short-line railway, Southern Rails Co-operative, and served as general manager from 1991 to 1997. When he left Southern Rails, he stayed on as a board member, and worked with the Ministry of Highways Short Line Advisory Unit supporting other efforts of farmers to start short-line railways. Since 1991, Paul wrote a weekly column on farming and transportation issues with a social justice focus featured in papers across Western Canada. After leaving the government in 1999, his expertise on transportation issues resulted in consulting work across Western Canada and the United States, which he continued up until his untimely passing. He was named an honorary lifetime member of the Saskatchewan Institute of Agrologists in 2008. Though he was active with his work off the farm, his true passion was farming, the land, and community. He loved everything to do with the outdoors hunting, bird-watching, camping, gardening, and searching for rocks with fossils while walking countless miles of railroad track and fence. Paul's compassion stretched to all living things; he often doctored sick cats, lambs, and even wildlife he came across, in an effort to save a life. He loved to organize drama for the children in the area and produced an annual Christmas play with them that brought the community together. Paul was thirsty for knowledge, and there was hardly anything that he couldn't do or wouldn't try. If he didn't know how to do something, he would find out. No matter how serious life and politics became, Paul never lost his trademark sense of humour; it was a pleasure to endure his teasing or fall victim to one of his practical jokes. Above all, Paul was a man of faith, and served as a liturgical coordinator in his parish. Vigil for Paul will be held at 7:30 pm on Wednesday, July 1st at St. Anne's Catholic Parish in Truax, Saskatchewan. A Funeral Mass celebrating his life will be held at 1:00 p.m. on Thursday, July 2nd, at St. Joseph's Catholic Parish in Claybank. Interment will follow at the Truax CemeteryCatholic Section. In lieu of flowers, donations in Paul's memory can be made to Amnesty International or Development and Peace.

A Terrible Loss to All of Us

2009-06-26T18:26:00.003-05:00

I was imformed today by Faye Beingesner of the tragic death of her husband Paul in an agricultural accident on June 25. The article below is his last. It seems to me in character of this great caring man that his last two articles were of the plight of the worlds impoverished and starving peoples.

At this time I'm unable to write more since I'm full of an immense sorrow, and anger, that such a towering figure is lost to us all. He will be sorely missed.

Little Muddy

First World Economic Policies Increase Hunger

2009-06-26T18:10:00.002-05:00

Column # 725 22/06/09

The World Food Program, an agency of the United Nations, announced
last week that the number of hungry people in the world rose this year
to over one billion. It is a startling number. It says that, though
the world continues to grow richer in many senses and for many people,
it is growing poorer at supplying more of its citizens with food. This
is not the way it was supposed to be, not the way it was from 1990 to
2005. In that time period, poverty (extreme poverty) in developing
countries fell steadily. Around 2005, this reversed, and poverty, and
with it hunger, began to rise again. This has continued unabated.

The large increase in hunger in the first half of 2009 has been blamed
by the World Food Program on continuing high food prices, but it has
been much longer in the making than the commodity boom that arose from
the banking crisis in the U.S. last year. Like the market crash and
sub-prime mortgage mess, hunger in poor countries has been caused in
many cases by actions taken in rich ones.

Until recently, international agencies like the World Bank, the
International Monetary Fund and the U.S. Treasury Department promoted
policies that came to be known as the Washington Consensus. These
policies became requirements for countries that wanted loans from the
World Bank and IMF. The American government and governments in Europe
also demanded that countries wanting to receive aid follow the
prescriptions of the Washington Consensus. Key among these were trade
liberalization, privatization of state enterprises and deregulation.

One of the results of the Washington Consensus was that spending on
agriculture by poor countries declined. This was often demanded as a
condition for aid and loans. Meanwhile, the amount of money given by
rich countries for the development of agriculture in poor countries
also declined. While imposing these restrictions on underdeveloped
nations, the U.S. and the European Union continued to provide ample
subsidies to their own agriculture sectors. It was fully expected that
poor countries would be able to buy their food needs on international
markets while switching their economies over to export oriented
agriculture and industries. They would export flowers to us and we
would export food to them.

The result was that the food producing capacity of many poor countries
declined. Agricultural research and infrastructure were neglected and
subsistence farmers were pushed aside for oilseed plantations and
other export crops.

In 2007/2008, food prices began to rise as a long period of declining
food stocks world-wide suddenly got noticed. On top of that, the
economic collapse in many developed countries reduced markets for the
production of the poor. They could no longer afford to eat.

Some world governments continue to prescribe more of the same as the
cure for hunger and poverty - more trade, more deregulation and more
privatization. But here is the odd thing. Two of the largest and
poorest countries in the world have reduced poverty to a greater
extent than any, and they did it while violating most of the
principles of the Washington Consensus. I'm talking, of course, about
India and China. Both countries resisted privatization of government
services, continued to protect their own economies with tariffs and
did not make deregulation the be-all-and-end-all of political policy.

So what's to be done? We have rapidly increasing hunger at a time when
rich countries are preoccupied with their own economic troubles, like
whether we'll be able to keep all the Hummers on the road. With
troubles like that, how will they have time to think about the hungry
in far-off lands?

Various international agencies have proposed some solutions. These
include

* Increasing aid to agriculture in poor countries and targeting it at
appropriate production that will meet the needs of rural and urban
poor.

* Building food reserves, like India and China did, that can be
released at times when supply is low and prices high. This will
prevent price volatility.

* Tighten regulations on stock exchanges that trade in commodities to
prevent excessive speculation.

* Negotiate trade agreements that allow poor countries to protect
their economies in times of crisis and exploitation.

* Control the market power of massive corporations that can cause
markets to swing on their whim.

Of course these measures run counter to the laissez-faire economic
policies promoted by the world's major powers. But in the current
economic crisis, they are precisely what is needed. Having caused the
problem to a great extent with the failed policies of the Washington
Consensus, rich nations bear some responsibility toward the poor.

In the short term we need to alleviate the hunger that is pressing
down on one billion people. Nor is the cost significant compared to
what we are currently showering on our own economies. Less than one
percent of the global stimulus package would fund the current deficit
in the World Food Program.

We should not underestimate the value of living in a world where
hunger is eliminated. As someone pointed out, any country is only four
missed meals away from anarchy. And anarchy that strikes in one
country often has ramifications for another half a world away.

© Paul Beingessner beingessner@sasktel.net

Cheap Food Not Much of an Answer

2009-06-18T14:50:00.001-05:00

Column # 724 15/06/09

I recently saw a story about farmers reducing fertilizer use, in response to high prices. The story warned that this was dangerous, as farmers should not be reducing inputs in an age of food shortages. It went on to argue that farmers will benefit from maximizing production. Another news report the same day pointed out that the food crisis was far from over, despite being overshadowed by the world economic crisis. While farm products have declined in value, they are still priced beyond what many in poor countries can afford. As if to reinforce the point, we are now being told that the number of malnourished citizens of Earth has topped one billion.

While the American Declaration of Independence may have declared that all men are created equal, the same can no longer be said of all hungry people. The hungry, it seems, can be divided into two classes - those with money and those without. That you can be hungry without money is self-explanatory. But being hungry with money requires some elaboration. It is the fate, or at least the fate they anticipate for themselves, of people who don't have enough arable land or perhaps water to grow sufficient food for their needs. The obvious examples are the Arab Gulf states, swimming in oil but singularly lacking water. Saudi Arabia, for example, used to grow a great deal of barley and wheat. It stopped doing that when it became apparent it would thereby consume all its fresh water. Other countries in the same boat include Japan and China.

Wealthy but hungry countries have a solution to their problems. They are buying land in poor countries that are willing to sell or lease land to produce food, which then belongs to the wealthy country, or at least to the company that represents that country. A ludicrous example of this is Sudan, a country that relies on food aid to feed its people, but which is willing to allow its land to be taken over and food to be exported.

In the end, this technique simply takes food out of international markets, and will likely result in lower prices for all foods, as demand is reduced in importing countries. Prices to the farmer will decline, and this will undoubtedly be seen as positive by folks concerned with world hunger.

You don't need to be a farmer, with a whole lot of skin in the wringer, to see that this isn't a good thing.(It does help, though.) Farmers, the few that remain, know full well they do not receive enough for their products to make farming sustainable over the long run. They also know the conundrum food producers and consumers face. Without more money, farmers will reduce fertilizer use, limit other inputs, and production will fall.

The result will be catastrophic for poor people. So, what to do?

First of all, international agencies and governments should quit using the simple argument that food prices are too high. Opponents of ethanol argue, for example, that using feed grains to produce ethanol has raised the price of food in the U.S. and around the world. This, apparently, is a strike against ethanol.

Bad argument. (There are lots better ones to use.) What it says is that farmers should produce cheap food. That is the way to combat hunger. As I argued earlier, farmers can't and won't produce crops for inadequate returns forever. That ethanol production is a better deal for farmers than selling to food markets is simply an indictment of the international economic system.

Those who care about the hungry should be glad for higher food prices in one sense. These ought to insure farmers will continue to produce food. The real question is not how high food prices should be. They should be high enough to ensure farmers a reasonable living. The real question is, how will the hungry be fed? That leads to a different set of answers than simply eliminating the things that keep food prices high.

Now, to head off the critics I can already hear in my head, let me be clear that I don't think higher crop prices necessarily lead to more income for farmers. In most cases, that greater value is simply eaten up by input makers and service providers. Just as those concerned with the poor need to reframe the question of how people will be fed, farmers and politicians need to reframe the question of how farmers can be sustained. Good prices alone will not do it, in a system when market power is concentrated in a few hands. The temptation is to forget this when times are good. Times will not be good forever.

© Paul Beingessner beingessner@sasktel.net

Rushing Madly Off in All Directions

2009-06-08T12:22:00.002-05:00

Column # 723 08/06/09

When mad cow disease hit western Canada in May, 2003, farmers got a
lesson in basic economics. The lesson wasn't so much that prices went
down in Canada. Take away the market for something like 50 percent of
the cattle produced in Canada, and prices will take a gut-wrenching
tumble. That was a given.

The real lesson came in what happened in the United States. Canadian
beef constituted a small amount of the beef consumed in the U.S.,
something less than 3 percent. To Canada, obviously, the amount was
huge. To the U.S., not so much. But cattle prices in the U.S.
skyrocketed. Farmers were getting record high prices for their calves,
and this continued for some time. The lesson was in the major impact a
small change in supply could have on a market fairly well balanced.

It is a lesson that has apparently been forgotten (if it was ever
learned) by some Canadian grain producers. These are the people
moaning that prices for durum wheat at elevators in the United States
in the 2008/09 crop year have been higher than the CWB Pool Return
Outlook for durum western Canada. So we have the vice-president of the
Western Canadian Wheat Growers berating the CWB, claiming it is
"costing farmers a bundle".

No doubt there is such a thing as willful ignorance, but it is hard to
believe that Stephen Vandervalk actually believes his own rhetoric. He
should know, for example, that the CWB sells only a small proportion
of western Canadian durum to the United States in any given year. This
crop year, the U.S. has taken about one-sixth of our durum. The entire
U.S. durum market amounts to about half of our production. So if
Vandervalk could have his way, and start madly trucking his durum
across the border to those American elevators, and if all, or even a
significant number of Canadian farmers did the same, it would be mad
cow in reverse. The huge increase in supply would cause prices to
crash faster than you could say, "Geez, how dumb was that?"

Of course, comparing American elevator prices to the pooled CWB price
is screwy logic to begin with. Five-sixths of our durum goes to
countries other than the U.S. Freight costs to get it there are much
higher, involving both domestic rail and ocean shipping. Countries
like Morocco and Algeria typically don't pay what richer countries do,
so the pooled price reflects a mix of these low and high prices.

To top it off, the CWB has been selling to the U.S. at prices that are
higher than the elevator prices Vandervalk is so determined he could
get. If he had his way, and crashed the U.S. price, everyone would be
a loser.

The other major complaint from the Wheat Growers is that the CWB has
not taken all the durum farmers have grown. This crop year, it will be
about 80 percent. This reflects that fact that the market for durum
worldwide is finite. Humans only consume so much pasta, couscous,
chapati and bulgar. Push more durum onto world markets than the world
will consume and it will be sold at feed prices. The problem with this
is that durum customers will see durum selling as feed and will reduce
their expectations of what they must pay.

American farmers should actually be quite happy with the CWB. By
refusing to flood world markets with cheap durum, it has held the
price up for farmers on both sides of the border. In a completely open
market, price signals for planting durum would come from the dropping
prices as farmers pushed too much durum onto the market. With the CWB,
the price signal is the fact that we can't sell all our production.
Farmers in my area know this. Durum has been a profitable crop with
price premiums over red spring wheat virtually every year. But we also
know we can't plant every acre to durum. In the case of durum, the
Wheat Growers seem to lack fundamental understanding of how markets
work.

© Paul Beingessner beingessner@sasktel.net

Potential to Profit From Pollution

2009-06-01T12:51:00.002-05:00

Column # 722 01/06/09

A lot of farmers don't really believe in global warming. Or, if you push them on it a bit, they don't believe humans are responsible for global warming. The warming of the earth itself is hard to deny when robins are seen north of the Arctic Circle and polar ice is melting at an unprecedented rate.

I'm no expert on climate, but you can't doubt that, despite the cool spring we are experiencing, the climate is getting warmer. This is particularly true in polar regions, which is what the models predict. And the speed of the changes in this area makes it difficult to believe it is just a normal cycle. Unless you have a massive volcano somewhere on earth, natural forces just don't act this fast.

All that aside, the global scientific community overwhelmingly believes that burning fossil fuels is the major cause of global warming, that its effects are irreversible in our lifetimes, and that they will not be a good thing. Governments around the world have been convinced by this as well, and there are international initiatives claiming to try to reduce emissions of greenhouse gases.

Coupled with the problem of global warming is the issue of declining stocks of oil and gas. In many ways they are two heads of the same monster. As hugely populated countries like China and India increase their standard of living, and as people in rich countries like Canada build bigger houses and drive more and bigger cars, use of fossil fuels is increasing dramatically each year. Most scientists agree we are reaching a point where production of conventional oil will not keep up with demand. The situation is even more critical with natural gas, despite new sources such as coalbed methane. Natural gas demand in Canada is increasing quickly, mostly for production of oil from the tar sands.

So, if you believe humans are responsible for global warming, or if you worry about the eventual real shortages of fossil fuels, it makes sense to reduce consumption of oil, gas and other non-renewable forms of energy.

Reduction of greenhouse gases has become a priority for governments – at least in terms of lip service. The reality is something different, as most governments, including ours, continually weaken and push back targets. However, the issue is not going away, and governments will continue to be pressured by the public and the scientific community to reduce greenhouse gas emissions.

Enter the cap-and-trade system for carbon emissions. (Carbon dioxide is a major greenhouse gas.) This concept says governments should introduce a cap on total emissions, then allow emitters to trade in a market for permits to pollute. So if a company wants to increase its emissions of carbon dioxide by, for example, opening up a new tar sand development, it would have to find someone who is willing to reduce their emissions, and then buy these surplus emission "credits".

Farmers and farm groups like the Canadian Federation of Agriculture have been quick to jump on this carbon credit bandwagon. Some agricultural practices have the ability to take carbon dioxide from the air and sequester it in the soil. Converting cropland to grassland is a good example. Of course, if the grass is re-broken, much of the carbon is again given off to the atmosphere. Agriculture is, in fact, all about taking and giving of carbon. Plants take carbon dioxide from the air to form their cellular structure, then release it again as the plant decays.

When farmers discuss carbon sequestration it is seldom about decreasing global warming. It is usually in the context of getting some money into the hands of farmers. Farmers argue that current practices like reduced tillage sequester more carbon so farmers should benefit from providing this "service" to society.

The problem with cap-and-trade is that it largely looks like a shell game. Farmers have adopted reduced tillage systems because they worked to improve the bottom line, not to reduce greenhouse gases. With or without a carbon market, they will not change what they are doing. For a company to then purchase carbon credits from farmers makes no real difference to what would happen anyway as far as the farmer is concerned. For the polluter, it is a low-cost license to pollute. You can't blame farmers for wanting to cash in – it appears everyone wants to cash in somehow. But to reduce greenhouse gases and stretch out the life of our oil supplies we need to reduce consumption.

In this regard, farmers can do a lot. We are major users of fossil fuels and there are many ways we can reduce this. I recently had a conversation with a farmer about energy use. He admitted that in winter you could readily find three tractors idling on their farm, even with only two operators around. They just don't like getting into a cold tractor, he told me.

Farmers can get an energy audit done for their farm. This is a real eye-opener and can show lots of ways to reduce energy consumption, and hence save money. This will have a greater effect on the bottom line than selling a carbon credit for something you do anyway. It will also have a real effect on greenhouse gas production, not just give the illusion something is being done.

© Paul Beingessner beingessner@sasktel.net

Dying Hog Industry Asks for a Billion

2009-05-25T13:50:00.001-05:00

Column # 721 25/05/09

It might not make me very popular in some circles, but the imminent
demise of the hog industry in Canada leaves me kind of cold. Oh, I'm
as worried as anyone about the job losses in communities that rely on
hog barns for local jobs. But the industry itself isn't one that I
brood over.

I thought about this the other day when I was discussing farm animals
with my three-year-old grandson. He had seen cows, he told me, and
horses and dogs, cats, chickens and sheep. But he had never seen a
pig. Pictures yes, and the little piggies on the ends of his feet, but
not a real live hog. And, living in Saskatchewan, I reminded his
parents, he wouldn't be likely to see one. I couldn't think of anyone
in this area who raises hogs the way my father, and most of his
neighbours did four decades ago. The closest thing to a hog around
here is the odour that drifts in occasionally on the south wind from
the huge complex of barns 20-odd miles south of here. And if I did
want to take him there to see a pig, we would be unlikely to make it
past the bio-security layer around the barns.

As I said, there used to be lots of hogs raised on diversified farms
in the prairie region. Pigs had the title of mortgage lifters. Many
farmers were in and out of pigs frequently. It was easy to ramp up
numbers when prices were high, since pigs reproduce early, often and
with large litters. It was just as easy to reduce numbers to a minimum
when prices were low. Hence the notion of the four-year hog cycle.

When factory hog farms came along, the dynamic changed. Instead of
reducing production in times of low prices, they doggedly kept on
churning out pigs. They had to do something to cover their huge fixed
costs. Prices responded by sinking and remaining low. Toss in the
occasional closed border due to real or imagined disease threats, and
hog farms have lost vast sums of money for over a decade. Of course,
the low prices that battered the huge hog barns destroyed the little
ones. Hogs disappeared from the prairie landscape, to be sequestered
in massive, sealed complexes.

No doubt the state of the industry is a surprise to many in government
and elsewhere who saw factory hog production as another tool in the
belt of rural development. Fifteen to twenty years ago, government
bureaucrats and agricultural economists were lauding the development
of the massive hog operation. Saskatchewan, we were told, would soon
be producing three million hogs per year. Markets were expanding world
wide. Canada, especially the prairies, had the lowest production costs
in the world. We only had to build them, fill them, and prosperity
would come.

The early barns looked good. What the public seldom knew was that they
were propped up by government subsidies for everything from water
development to building construction. Almost all of those early barns
are gone now, and gone are the community dollars that poured into the
pockets of the early entrepreneurs. The government of Saskatchewan
still owns huge hunks of one hog empire, and loans from many years ago
remain unpaid for many barns. These loans were to be repaid when
profitability returned. Profitability remains elusive.

The truth is, we were never a particularly low cost producer. American
corn always had us beat. And every hog added to our inventory had to
be exported, with most of these going to the U.S., to a country
already a huge exporter itself. Other countries, with cheaper and more
plentiful labour, were also increasing production. It isn't surprising
then, that it took the bubble only a decade and a half to burst.

Now, hog farmers across Canada have asked the government for a billion
dollars in ad hoc payments to drag them through the worst crisis
they've faced. What urban Canadians won't know is just how few people
actually raise hogs. They also won't know that there is no light at
the end of the hog tunnel, only a lot of desperate people hoping for a
miracle.

Driving twenty-five miles south of Regina last week, I got a huge
surprise. Rooting around by some wooden granaries near the road was a
herd of footloose pigs, older sows by the look of them. I have no idea
where they came from, or where they went. But as I went by, I gave
them the thumbs up. At least for a short while, they were the only
lucky ones in a sad industry.

© Paul Beingessner beingessner@sasktel.net

Deer Populations Reach Epidemic Numbers

2009-05-18T22:49:00.001-05:00

Column # 720 18/05/09

Hay was pretty scarce in my part of southern Saskatchewan last fall. Then came a cold winter that went on forever. Hay supplies were stretched to the limit, and many farmers fed extra grain and purchased hay. This spring looks better, with lots of rain, following a winter with more snow than we've seen for a while. Now, if it would just warm up, the grass might even start to grow in earnest.

As I was seeding a field tonight, I noticed the great potential in a low-lying hay field that provides one of my neighbours with a good deal of his winter feed. As dusk approached, I also saw the herd of whitetail deer that began to swarm out of the surrounding chokecherry and Saskatoon bushes. Well before the sun set, they covered the field and were spilling out onto my wheat stubble. It began to look doubtful if there will be any hay there come summer.

Saskatchewan Environment says whitetail deer populations are near the all-time high for the province. Milder winters and lower hunting pressure mean numbers are still increasing. My own experience bears this out. In the 40-odd years I've hunted around my home, I have never seen so many whitetail deer. It was easy to go out for a half-hour toward evening in late winter and count hundreds of deer without going more than a few miles from our place. In addition to the whitetails, we also have an ample number of mule deer, and moose have even begun to populate this farming district!

While deer have increased, the number of hunters has gone the other way. In the late 1960s and early 1970s, Saskatchewan regularly saw 70,000 to 80,000 hunters take to the field for whitetail deer. By 2004, this had declined to 30,000. Only in the last couple of years have the numbers slowly begun to increase. Though it might be tempting to attribute the reduced number of hunters to the fervent anti-hunting segment of the animal rights lobby, it is more likely that the decline in rural population and the increasing age of those that remain have played a larger part.

Bourgeoning wildlife numbers, while nice to look at, are creating increasing conflict with farmers and ranchers. Our herds of deer did some real damage to neighbours' feed stacks this winter. Coyotes have been pruning our sheep flock with great regularity. The vast numbers of geese that pass through each fall are just waiting for the late harvest that will eventually, inevitably come. Vehicle accidents involving deer and larger ungulates cost Saskatchewan taxpayers millions each year. The situation is much the same in Alberta and Manitoba.

Hunting has an important role to play in mitigating this damage, but there is little indication that hunting will increase as a pastime. One new measure by Saskatchewan's government is to open up hunting on Sundays, which will begin this fall. If urban hunters can look forward to two days when they can hunt on the weekend, more might return to the sport they abandoned to the pressures of Monday to Friday jobs.

A hopeful sign in our area has been the increasing number of girls taking hunter safety courses. When I was a kid, girls who hunted were scarcer than hen's teeth. Not any more.

While many of my urban friends simply can't see the allure in killing animals for sport, it is usually not that simple. Hunting is a way to spend time with family and to learn to appreciate nature. Hunters generally enjoy wild meat, and sausage making is a family event at our house, and many others. It's also a way to get some benefit out of these animals that farmers feed for free. And if you can't find time yourself to process a deer, many food banks are more than glad for the donation.

© Paul Beingessner beingessner@sasktel.net

Raining on the Railway

2009-05-13T06:32:00.003-05:00

Column # 719 11/05/09

Nobody likes rain on the day of a parade. And so the metaphor about raining on someone's parade is pretty apt. You don't get to be the crowd favorite if you're disrespecting an idea the crowd cherishes.

So I write this column with some hesitation, because the parade I am going to sprinkle on is getting lots of positive press right now. And no one seems too concerned about the implications.

Short line railways haven't been too far from the news since they had their western Canadian beginnings in 1986. That was when colorful and outspoken Alberta entrepreneur Tom Payne began Central Western Railway in, well, central western Alberta. Three years later Saskatchewan had a humble start in the short line business when Southern Rails Cooperative took over short sections of CN and CP track in southern Saskatchewan.

While Southern Rails is still operating, though not with all its original track, Central Western has gone the way of the dinosaur. The difference? Central Western was privately owned and failed to return enough to its investors to justify its continued operation. Southern Rails is community owned, and its owners benefit by its operation, not from a return on investment.

The story has repeated itself several times in western Canada. Perhaps the worst and most striking example came when a company from Salt Lake City purchased the Miami and Hartney subdivisions in southern Manitoba in 1999. Local governments and farmers had organized tentatively to look at buying the line but never coalesced into anything substantial. The Tulare Valley Railway, owned by rail salvager A&K Railroad Materials, convinced CN it could run the lines as a short line. By 2007, the track was gone and customers on the line were crying the blues.

It's an interesting truth that neither Manitoba nor Alberta has a short line railway operating on a grain dependent branch line at this time, while Saskatchewan has many, and the numbers increase yearly. As in the early beginnings, the difference is in ownership. Saskatchewan's successful short lines are all community based. None are seen as investment vehicles. All are rather a means to an end - the end being the continuation of rail service for the benefit of the farmers and communities involved.

I won't dwell on the lack of entrepreneurial spirit displayed by farmers in Saskatchewan's sister provinces. That would be a cheap shot. And I won't mention the failure of governments in either Alberta or Manitoba to support community-based short line ownership, compared to Saskatchewan's many efforts in this regards. That would simply be taunting the less fortunate. Besides, if recent news is any indication, that may be changing, at least in Manitoba.

The newly formed Boundary Trails Railway Company is the first short line in Manitoba to be largely owned by producers. It also received substantial aid from the provincial government, in the form on a $615,000 forgivable loan. Everyone involved, from farmers to the province have waxed eloquent about the benefits of a producer owned short line.

All this is good. And it's about time Manitoba farmers followed the successful model from Saskatchewan. But now for the rain. The railway will be operated by another company, cited in press stories as the Central Canadian Railway, which will provide "car hauler, maintenance services, links with major railroads on traffic and delivery issues, snow clearing and basic administrative services".

Most Saskatchewan short lines do this work themselves. Not all mind you, but where a Saskatchewan short line contracts outside work, it is generally done by a short line that has an immediate presence in the area, and is another producer-owned entity.

The simple fact is that there is seldom enough money available in moving grain on branch lines to afford extensive services from outside contractors. Many Saskatchewan railways learned this the hard way. It is a bit of an odd way for farmers to do things. Few would consider hiring custom operators to carry out every bit of their farm operation, from seeding to bookkeeping. There would be very little left over if they did. The short line railway isn't much different from a farm, and requires similar management. If times are tough, you watch every penny. Outside contractors have a different expectation, and often simply want to maximize their involvement and return.

I hope the new and optimistic owners of the Boundary Trails Railway have considered this. It may work for them, and I wish them many days of sunshine.

One a related note, rumour has it the same company that consumed the Miami and Hartney subdivisions is poking around the Alliance subdivision in Alberta, and wants to talk to producers on that line, which CN has up for sale. Now that's a parade that deserves a thunder storm.

© Paul Beingessner beingessner@sasktel.net

XL Closure Predicted By Smart Cattle Guy

2009-05-06T17:37:00.001-05:00

Column # 718 04/05/09

Regular readers of this column will know I wasn't too enthused about
the sale of Lakeside Packers to XL Beef. The Competition Bureau
decided that Canadian farmers would be well enough served by having
two companies controlling 95% of beef packing in Canada. It blessed
the sale with the proviso that it would "watch" and if competition
wasn't sufficient in the future it would have to act. (What the bureau
could possibly do a few years down the road, other than wring its
hands, is beyond me.)

Readers will also know that I lambasted some of the groups claiming to
represent cattle producers for their unwillingness to oppose the
consolidation in the industry. One such representative defended this
by saying that the packers (XL and Cargill) write good cheques, so why
would we criticize them? (They may be good but they are so darn
small!)

The columns I wrote about this brought me probably the largest
response since I began writing, more than 700 columns ago. While some
of it was negative, most was positive. There are a lot of angry cattle
farmers out there. Angry at governments, and angry at the leadership
of farm organizations.

One large cow-calf producer who phoned me surprised me a bit when he
said that now that XL was going to own Lakeside Packers, it would soon
close XL Beef in Moose Jaw, and likely its plant in Calgary. Even for
someone as jaded as me, that seemed a bit much. "Of course," he said.
"Lakeside is operating below capacity, so why would they keep the
other two plants open?"

Geez, what a cynic, I thought. But, of course, it turns out he was
right. XL announced on April 24 that it is "temporarily" shutting the
Moose Jaw plant down, with a likely resumption of operations in
September. One employee was less optimistic, saying the September
re-opening was more a wish than a likelihood.

The Western Producer reported the reactions of the Canadian Cattlemens
Association and the Saskatchewan Stock Growers Association. Neither
appeared upset with Nilsson Bros., owners of XL. CCA president Brad
Wildeman said, "If there's nothing to slaughter, you can't expect to
keep it open". SSGA president Ed Bothner was equally sympathetic.
"It's out of their control." Even the head of the union at XL bought
the argument. "Who would think in Saskatchewan we'd have no cows?"

Since the plant at Brooks has been operating at about 75% capacity,
and Moose Jaw has had a reduced kill lately, the logical assumption is
there just aren't enough cattle to go around. Of course, during BSE,
with the border closed, prices were low because there wasn't enough
slaughter capacity in Canada to kill all the animals available. Now,
that the border is open (at least for now) cattle are again heading to
the U.S. and Canadian plants are short.

The thing about this is that cattle are being shipped to the U.S. In
other words, there are more cattle available to kill, but someone
else, in the U.S. is willing to pay more for them than the Canadian
plants. So there is something to slaughter, and it isn't out of XL's
control. Just pay more and you'll have more cattle. And the cow
numbers in Saskatchewan are down, alright, but only a bit over two
percent from six months ago. There are still cows in Saskatchewan.

And, if there are less cattle overall, it is because farmers stopped
raising them, and began to sell off their cows because there was no
money in it. Let's face it. The packers made a killing during BSE. If
they had passed more of that back to the farmer, there would be more
cows now, and no one would be talking about shortages of animals. So
the packers are victims of a problem of their own making.

Now, I know that the market doesn't work that way. The packers will
never pay more than they have to, because they are business people,
not charitable institutions, and they mainly think short term. To get
money out of them, we need to have competition. That is the nature of
our economic system. Rob Leslie, senior analyst at Canfax, knows that.
The Western Producer article quotes him saying the closure will mean
lower prices for feeders and fat cattle. "We're reducing capacity and
the plants don't have to go out there and be quite as aggressive on
their bids to procure cattle."

Of course, that will reduce cattle producers' profitability even more,
leading to fewer of them raising cows. Which may lead to more plant
closures, or fewer re-openings.

Now if XL had not been allowed to buy Lakeside, and another buyer had
been found, would Moose Jaw have closed anyway? Maybe. Or maybe not,
since it is expected there will be more cattle available in the fall.

So tell me again why the cattle organizations figure consolidation in
the packing industry is okay. I haven't had a good laugh in quite a
while.

© Paul Beingessner beingessner@sasktel.net

Cosmetic Pesticide Ban Not So Frightening

2009-04-28T09:28:00.001-05:00

Column # 717 27/04/09

I recently read an article that declared farmers should be frightened by the recent bans on cosmetic herbicides in Quebec and Ontario. These laws, in place in Quebec since 2006 and implemented this month in Ontario limit the use of pesticides, including herbicides and some insecticides for "cosmetic" reasons. The bans include using herbicides to produce weed-free lawns and even spraying of insects where there is no essential health-related reason to do so.

These laws have their basis in some recent scientific discoveries. One of these is that pesticides that breakdown fairly quickly with exposure to sunlight and air are much slower to break down in the absence of these. So the 2,4-D that Joe Urban applies to his lawn to get rid of dandelions gets carried into the house on Joe's shoes. Joe doesn't know it, but in the house, the 2,4-D persists for weeks or even months, exposing Joe's kids to continuous small doses of the chemical.

The idea behind a cosmetic pesticide ban is predicated on the word "cosmetic". Cosmetic pesticides are used only to improve the appearance of something. They are unnecessary from an economic or health point of view, and there are other options that can be used, like pulling your weeds. Nevertheless, the bans are fairly far reaching and apply to parks, public areas, and even home lawns and gardens.

Similar legislation is being investigated by other provinces including New Brunswick and Nova Scotia and by many municipal authorities.

While there are many detractors of such a ban, including of course the companies that sell lawn-care chemicals, there are many supporters. The Canadian Cancer Society is strongly supporting and promoting cosmetic pesticide bans. It claims that "there is suggestive, but growing, evidence linking pesticide exposure with non-Hodgkin’s lymphoma, adult and childhood leukemia, brain cancer, kidney cancer, pancreatic cancer, prostate cancer, and some lung cancers." The Cancer Society says such bans have widespread public support, citing surveys showing 76 % of British Columbians are in favor of these measures.

Farm groups worried about cosmetic pesticide bans see them as the thin edge of the wedge – can bans on all pesticide use be far behind? They also point to what they consider to be the unscientific nature of such bans – if pesticides are safe for farmers to use, how can they be unsafe for anyone else?

As a farmer, I don't buy the thin-edge-of-the-wedge argument. I didn't buy the same argument about gun registration either – that registration was the first step toward confiscation. I am sure that there were automobile owners who claimed the same thing one hundred years ago when told they would have to license their cars. American gun enthusiasts (read lunatics) are saying the same about giving up their Kalashnikov assault rifles and rocket launchers.

As to the safety of chemicals, farmers have become increasingly aware of the danger of their careless use. I vividly remember coming across a local farmer with his disker hung up on a railway crossing thirty-odd years ago. I got out of my truck to go help when I saw his entire face, arms and hands were a bright pink, the result of applying lindane seed treatment. I haven't seen something like that for a while but there are still too many farmers not properly using respirators, goggles and safety suits.

Governments in Canada do have the right to impose cosmetic pesticide bans. That right was upheld by the Supreme Court of Canada in 2005. One would think that would be the end of the story, but governments are no longer so sovereign in this day of treaties and trade agreements. The chemical companies have one more hand to play. Dow Chemical, maker of 2,4-D, the most commonly used lawn herbicide, has launched a challenge to the Quebec ban under Chapter 11 of the North American Free Trade Agreement. Chapter 11 allows private companies to sue the Government of Canada if it does anything that interferes with a company's ability to make a profit. Dow claims the ban is an unfair expropriation of its business.

Under NAFTA, the complaint may be heard in secret, by a panel of arbitrators, one picked by Dow, one by the government of Canada and one by mutual agreement of the two parties. If the secret decision by the secret panel goes against Canada, taxpayers will be on the hook for millions. It has happened many times before. In the first seven years of NAFTA, the Canadian government was sued for over 11 billion dollars. NAFTA panels have even declared it a violation of a company's rights if it is "rudely treated by government officials" even when the complaint the company is lodging has no merit!

Chapter 11 is one example where governments have willingly given up their sovereign rights to unelected, unrepresentative panels which citizens do not control. Frankly, I am way more afraid of Chapter 11 of NAFTA than I am of any ban on cosmetic pesticides.

© Paul Beingessner beingessner@sasktel.net

Creative Ways to Break a Contract

2009-04-22T02:46:00.002-05:00

Column # 716 20/04/09

2009 was a tough year in the grain markets. Prices began relatively
low at year's beginning, rose to great heights in mid year, and fell
back dramatically at year's end. If you sold or priced your grain at
the peak, you were a genius. At any other time, you were just another
of the also-rans.

With wildly gyrating markets, the CWB suffered some losses in hedging
its producer payment options. It took heavy criticism from folks who
don't like the CWB, but the impact on individual farmers was
relatively small.

Some grain companies had a different way of dealing with their
mistakes. When prices were high mid-year, grain dealers were signing
contracts with farmers that yielded some very lucrative values. When
prices fell at year end and into 2009, grain dealers found themselves
with a lot of signed contracts that no longer reflected world prices.
Of course, those who had properly hedged their purchases could escape
with less damage. For those who hadn't, things were not so good.

No farmer likes to have sold too early in a rising market or too late
in one that is falling. But farmers in this situation generally honor
their contracts. Not to do so leaves you open to legal action. But
some grain dealers discovered this year that there are creative ways
to break a contract without actually doing so.

I've been hearing stories about this for some time, but a recent phone
call from a farmer near Riverhurst confirmed how serious this issue
can be. These folks had priced green lentils in the fall at 40 cents a
pound for number ones and 38 cents for number twos. Their samples to
the Canadian Grain Commission came back grading number one, with
around 6% dockage. When the grain dealer finally called for their
grain in the winter, he told them the grade was really a number three.
And not a number three at the high prices when the contract was
signed, but a number three at the current, much lower prices. And the
dockage had now gone to 14%. No amount of arguing would budge the
company.

Now had this been a licensed grain elevator, the producer could have
demanded an inspection of the unload sample by the CGC. This grade and
dockage determination would have been binding on both parties. But
grain dealers are exempt from this provision of the Canada Grain Act.

Nor was this the only company this farmer dealt with. Two other grain
dealers wreaked similar havoc on the farmer's bottom line. In all, he
was short $20,000. Pleas to the CGC for assistance met with no result.
Not in our mandate, they were told.

I told this story to several farmers and a barrage of similar stories
emerged. If you haven't had this problem, you aren't growing green
lentils, one told me. It appears some grain dealers found creative
ways to break contracts that were not in their favor.

Donna Welke, former Assistant Commissioner for Saskatchewan to the
CGC, advised farmers to approach the grain dealer this way: "We have a
disagreement and I'd like to submit it to an independent third body
for an assessment of grade." If the dealer refuses, she suggested
asking "Why? Are you trying to cheat me?" Of course, there are no more
Donna Welke's to advise farmers. The Conservative government has
failed to appoint new Assistant Commissioners, though the Act calls
for them to do so.

The bottom line is that farmers need to read their contracts very
carefully, and know what they are signing. Contracts are written by
grain companies so they reflect the needs and wishes of the company,
not the farmer. They should outline a method of settling disagreements
between the parties, with the logical arbitrar of grade and dockage
disputes being the CGC.

Farmers also should understand the need to take mutually agreed upon
unload samples at the elevator. These would become the basis for any
dispute resolution. It also would be wise to spell out the method for
testing dockage. Use of a number 9 round hole sieve can yield dockage
many percent higher than the number 8 hole sieve that most dealers
use. Several farmers I spoke with ended up being shafted by this
method.

Bill C-13, the bill to amend the Canada Grain Act, contained measures
to make grain dealers subject to the same provisions that apply to
licensed grain elevators. This would give farmers automatic recourse
to the CGC in cases of disputes over grade and dockage. C-13, with
this exception, was a bad bill. It failed to make it through the House
of Commons, and this is good, but there is still a pressing need for
this change. There is also a pressing need for the government to
recognize that farmers need protection via the act, that this is the
reason for the act's existence. That fact hasn't changed in the
century it has been in place.

© Paul Beingessner beingessner@sasktel.net

Corporate Farm Takes in First Nations Land

2009-04-13T14:32:00.003-05:00

Column # 715 13/04/09

Some farmers are sure to be concerned about the news that a huge
corporate farm is coming to western Canada in time for the 2009
planting season. Conceived by an eastern investment firm, One Earth
Farms will be a collaboration between Sprott Resource Corp. and
several First Nations bands in Saskatchewan and Alberta. Starting with
50,000 acres the first year, One Earth Farms intends to amass one
million acres in all. The land will mostly come from First Nations,
many of whom purchased farmland using money from Treaty Land
Entitlements.

Despite the usual concerns that arise in a country dominated by
moderately sized family-owned farms, there are good reasons to be
hopeful about One Earth Farms. There are also some reasons for
skepticism about the success of the venture.

On the positive side, One Earth Farms hopes to train young aboriginal
people to act as workers on its farms. To that end, the founder of
Sprott Resource Corp. intends to donate $1-million to the University
of Saskatchewan to create a scholarship fund for aboriginal students
studying agriculture. If this idea is successful, it will provide some
much needed employment for aboriginal people while giving them skills
that might be useful in many other types of work. Anything that can
help to lift aboriginal people out of poverty is something that should
inspire hope.

But will the whole idea work? Corporate farms have been tried before
and have had limited success. Eric Sprott, founder of the now-publicly
traded Sprott Resource Corp. thinks the time is right for money to be
made in agriculture. Sprott gained a lot of wealth by playing the
commodity boom of recent years. One Earth Farms expects agriculture to
present significant opportunities for wealth creation in the near
future. Kevin Bambrough, CEO of the new entity said recently, "We
believe that the opportunities associated with this new venture are
unprecedented in the agricultural industry."

Perhaps the biggest barrier to success lies in the nature of the
company itself. One Earth Farms will be the actual farming company,
but in the world of corporate finance, nothing is ever simple. So
there will be One Earth Farms, but also One Earth Resources Corp., and
One Earth Farms GP Corp. The last two companies appear to be vehicles
for managing the land First Nations will commit to the project. Each
of these companies will have Chief Executive Officers and Chief
Operating Officers and Chief Financial Officers, each raking in
hundreds of thousands of dollars, or, if Wall Street is their model,
perhaps millions. There will be boards of directors that will have to
be compensated and managers for each company. There will also be high
profit expectations from the shareholders of Sprott Resource Corp.

All this will have to be sustained on the backs of farmland and
livestock. (One Earth Farms plans on purchasing one thousand cows in
the first year.) Neither of these has much of a history of success in
recent years.

Admittedly, there are advantages to large farms, and One Earth Farms
feels it can take advantage of them by negotiating preferential prices
for inputs and crop outputs. There is some likelihood of that. On farm
supplies, large farmers already receive price discounts not available
to smaller farmers. Interestingly, One Earth Farms feels there will be
marketing benefits to commanding large amounts of production. In this,
it runs contrary to the prevailing notion of some farmers who feel
that collectively marketing their products, as with the CWB, provides
no advantage at all. One Earth Farms may have something to teach
established farmers here.

The Achilles heel of One Earth Farms may well be management and
labour. Companies that start with grandiose plans often attract
management with a flair of extravagance. The Saskatchewan Wheat Pool
springs to mind. And few grain farms function with all hired labour.
Not many wage labourers want to put in the hours that farmers do or
have the same commitment to survival that has kept farmers on the land
through the thinnest of times.

It will be interesting to watch. Will One Earth Farms be the wave of
the future, or will it simply be another case of non-farmers trying to
extract wealth from the farm?

© Paul Beingessner beingessner@sasktel.net

Good Riddance to C-13

2009-04-07T14:13:00.002-05:00

Column # 714 06/04/09

Farmers should be grateful that Bill C-13, a bill to amend the Canada
Grain Act, failed to make it through Parliament. The Bill was removed
from consideration for second reading last week by a motion supported
by all three Opposition parties. The motion called for the bill to be
brought back to Parliament in six months, but the likelihood is that
this session of Parliament will be terminated before then, thus ending
the path of this bill for now.

Bill C-13 has had a long history. It began as C-39, in December, 2007.
It failed to make it through that Parliament and was re-introduced, in
identical form, as C-13 in early 2009. Since re-introduction, it has
been criticized by farm groups across Canada. That criticism arose, in
part, because the government failed to change the bill at all, despite
opposition from the ag community.

Throughout debate over the bill, the Conservative government has tried
to sell it as an effort to "modernize" the Canadian Grain Commission.
The Agriculture Minister, and others, have repeatedly said that the
act hasn't been amended for decades, but agriculture itself has
changed immensely in that time. Hence, the act must be out of date.

The talk about modernization is clearly an attempt to influence
farmers by using jargon. Modern is good after all. What farmers would
not want to be modern? The government also talks about eliminating
"unnecessary and costly regulations". Sound good, eh? Farmers can ill
afford anything unnecessary and costly.

But the bill fails dramatically to live up to its hype. Its proposed
modernization includes ending the focus on furthering the interests of
farmers. Rather than a regulator, the CGC becomes a service provider,
working happily in the best interests of everyone. The bill ignores
the fact that not everyone's interests are the same, and not everyone
has equal power. The Canada Grain Act has traditionally focused on
producer interests for a reason - producers typically lack power as
they face massive grain companies.

The unnecessary and costly regulation the bill intended to end
consists of two things. One is getting rid of bonding for grain
companies. This part of the act ensures farmers will get paid in case
a grain company goes bankrupt. Despite Gerry Ritz's comments that this
hasn't worked well, it has worked quite well for the most part. The
government move to get rid of this requirement is based on the
ideology of privatization, since there is no practical replacement for
this bonding. The Western Barley Growers Association was given huge
sums of money by the government to develop an alternate mechanism, but
has produced nothing concrete. Ritz appears not to understand the
nature of laws when he says his government would not remove bonding
until there was a substitute available. If C-13 had passed, bonding
would be gone.

The second part of "unnecessary regulation" would have been the
elimination of inward weighing and inspection at port. It is true that
much of the grain that begins at an inland elevator ends at a terminal
of the same ownership, but certainly not all. Take Prince Rupert for
example. The terminal is owned by five grain companies. Do they trust
each other enough to mingle their grain without independent
inspection? Of course, there will be a need for inspection for things
like producer cars. The bill contemplated private inspectors. Would
both sides accept the verdict? The CGC would still do inspections on
outbound shipments, but the force of inspectors would be greatly
reduced and much expertise lost. The CWB would still require inward
inspection for several reasons. It allows it to know what stocks are
in the terminal, and allows it to capture a portion of the blending
gains for farmers. Since CWB grain still constitute the majority of
grain exported, inward inspection would still be needed. Only the
faces would change, with privatized inspection being the order of the
day. Not much streamlining there!

Both COMPAS, the company that studied the issue for the feds, and the
Standing Committee on Agriculture recommended the government set up an
office of farmer advocacy, since the CGC would no longer have farmer
protection as its main mandate, and since the government has
apparently eliminated the Assistant Commissioners to the CGC by
refusing to appoint any. The failure to set up this office has much to
do with Opposition party condemnation of the bill.

The Conservatives believe that getting rid of bonding, limiting farmer
protections and reducing the scope of the CGC means they are
modernizing it. Instead, it is just more of the same. Leave farmers to
deal with the market, in an environment where they are divided and
ultimately conquered. This might be the modern way, but it is hardly
one we should aspire to.

© Paul Beingessner beingessner@sasktel.net

Dump the Little Guy to Solve the Cattle Crisis

2009-04-01T12:56:00.002-05:00

Column # 713 30/03/09

The railways must love the coal industry. It has everything they want
- steady business, large facilities with high load-out capacity, no
real competition from trucks. And most coal mines have access to only
one railway so there is no pesky competitor to worry about. Take the
Elk River Valley in British Columbia for example. About 25 million
tonnes of metallurgical coal are produced in a small area here, mostly
for export to Asia.

CP Rail is the sole rail carrier in and around the Elk River Valley.
Given the volumes that are produced and the mountainous terrain, the
coal companies have no option but the railway to move their product.
The marketing and transportation environment for coal is simple, much
simpler, for example, than for cattle. With coal, there is a mining
company that produces the coal, the railway to transport it to port, a
terminal to handle it, an ocean carrier and a customer at the other
end. The party with the most power in this situation is the railway.
Railways spend a lot of time studying the coal company's costs and
prices. One observer said the railways know the coal company's costs
better than the coal companies themselves.

Why? Because the railways want to know how much they can charge the
coal companies without putting them out of business. In a competitive
environment, the railway would set its freight rates based on its
costs, and what it needed to charge to get the business. As a
monopoly, the railway can charge what the market will bear, so it
needs to know just how tight it can squeeze.

I was thinking about this when I went to a meeting on the crisis in
the livestock industry last week. Cattle production and marketing is
more complex than that of coal. There is a cow/calf producer, an
auction mart, maybe a backgrounder, a feedlot, a packer, a wholesaler
and a retailer. There are varying levels of power in this system. The
speaker at the meeting talked about the problems with consolidation in
the beef packing industry in Canada. With the purchase of Lakeside
Packers in Brooks, Alberta by XL Beef, two companies now control 95%
of the slaughter capacity for fat cattle. He also focused on the
problems caused by packers owning cattle - captive supply - which
allows them to influence cash market prices.

The speaker suggested farmers might find it useful to lobby
governments to implement measures to increase competition in the
packing industry and end the packers' use of captive supply.

After the meeting, we stood around for a bit drinking coffee. A couple
of ranchers, substantial operators, stood off from the group a bit. I
was close enough to them to shamelessly eavesdrop on the conversation.
Their solution to the cattle crisis was simpler than the meeting's
speaker had proposed. They decided the best thing was for them to hold
on to their herds, and wait until the small producers were all driven
out of business. Then the price of calves would go up and things would
be rosy again.

It seemed a reasonable solution. After all, farmers are leaving the
cattle business in droves, and cattle numbers are falling in response.
And it's so much less risky to go the waiting route than to actually
place a bounty on small producers.

But what the ranchers were proposing was troubling for a couple
reasons. For one, they displayed a singular lack of solidarity with
their fellow farmers. Their mindset, common also to agriculture
departments, was that other farmers are the problem. Just get rid of a
few more farmers and things will be fine.

The second problem with their line of thinking is that it shows a
profound ignorance of the current market environment. In the chain of
players that gets a steak from the farm to the face, farmers have the
least power of all. There is very little competition in the packing
industry, and packers determine the price feedlots are able to pay the
farmer. The retail sector is also shrinking. For example, one company,
Wal-Mart, controls over 30% of grocery sales in the U.S. Farmers, by
contrast, are many in number.

If there are extra dollars in the system, it is not the farmer who
will be in line to take them. Grain producers know that only too well,
as they watched input costs rise in lock step with grain prices last
year. Cattle farmers seem to be living in the past, a time when there
were many retailers and many packers, all vying for their business.
The fellows at the meeting clearly didn't understand the difference of
living in an environment with only a couple buyers. If supply does
drop substantially, and demand drives prices up, it may well improve
the price for butcher cattle somewhat, but the farmer will see few of
those dollars.

As if to prove my point, when I got home from that sobering meeting, I
had received an email. It was from a farmer who told me he had located
some receipts from butcher steers he sold in the 1970s. He took the
price he received and ran it through the inflation calculator on the
Bank of Canada's website. The calculator told him an equivalent price
today would be $2000 per steer. Today, a fat steer would do well to
bring just over half that amount. The big cattle guys should consider
the implications of that before they go gunning for the small
producers.

© Paul Beingessner beingessner@sasktel.net

Collecting Money Implies Representation

2009-03-23T16:55:00.002-05:00

Column # 712 23/03/09

Canadian farmers pay out a lot of money in checkoffs. There are
checkoffs on beef cattle, hogs and sheep, on grains ranging from wheat
to peas to canola. Most of these checkoffs are designed to provide
funding for research or to promote the commodity. Some provinces have
checkoffs requiring farmers to support farm organizations. The
checkoff is mandatory, but the farmer gets to choose where the money
goes.

Some checkoffs are refundable, if the farmer requests it. One of these
is the wheat and barley checkoff administered by the Canadian Wheat
Board. The money collected here is used mainly for varietal and
agronomic research. There are only a few farmers who request a refund
of their deductions, but, oddly enough, these are usually very large
farmers. Obviously they pay the most, but they also stand to benefit
the most.

Some checkoffs annoy me. The wheat and barley checkoff is one. While
the premise behind it is good - we need all the research of this sort
we can get - the outcomes are less than they could be. When new
varieties are developed with farmers' money, the licensing system
employed by the Western Grains Research Foundation allows licensees to
place many restrictions on how farmers can use the crops they paid to
develop.

The Saskatchewan Pulse Growers also have a checkoff, and it is largely
used for similar purposes. But the Pulse Growers have the wisdom to
keep their varieties freely available to farmers by not allowing Plant
Breeders Rights for the varieties their breeding program develops. I
have never been able to understand how this can work so well for pulse
crops while the Western Grains Research Foundation can't see the logic
of it for wheat and barley.

Cattle producers pay a $2 checkoff in most provinces, and $3 in
Alberta. In Saskatchewan, one dollar is mandated provincially and one
federally. The federal portion goes to the Canadian Cattlemens
Association (CCA) to fund its activities. It is not refundable. In
Saskatchewan, the provincial portion is refundable on request. The
federal dollar is what enables the CCA to claim, as it frequently
does, that it represents 90,000 cattle producers across Canada.

Recent statements by the CCA have angered some cattle folk. The CCA
did not oppose further consolidation in the meat packing industry when
Tyson Foods sold its Brooks, Alberta plant and feedlot to XL Beef. It
also has no problem with packers owning beef cattle, known as captive
supply. The U.S. Department of Agriculture has found that captive
supply has the effect of reducing prices paid for cattle. The CCA says
captive supply helps the packers to be efficient. This led one farmer
to comment that the CCA represents farmers in the same way that
Revenue Canada represents taxpayers - by using the force of law to
collect money from them.

The trouble for farmers who don't agree with the CCA positions is that
it really does represent them when talking to governments re
legislation and policy. At least, it does in the eyes of government.
It doesn't help much when governments are on the same page as the CCA
regarding competition. If you believe the CCA, competition is working
well in the beef industry. In responding to the National Farmers Union
paper regarding competition in the beef sector, the CCA says "Cattle
prices will only increase when consumer demand increases and consumers
are willing to consume more beef at a higher price."

That statement presupposes that packers and retailers will pass back
increased revenues to producers as an inducement to produce more. And
that is what would happen in a competitive environment. The trouble
is, nobody really believes that two packers creates a competitive
environment. At least, no reputable economist would support that idea.

The CCA logic on captive supply is worth examining. John Gillespie,
CCA Board member from Ontario, told the House of Commons Agriculture
Committee that packer ownership of cattle makes the industry run more
smoothly. He argues that having access to captive supply allows
packers to "smooth out the ups and downs as far as capacity is
concerned".

The flaw in this logic is that, if packers were not allowed to own
cattle, the same number of cattle would still be available, but the
packers would have to get them from the market. In those "down" times,
they would have to pay more to get the cattle to keep their kill lines
full. Captive cattle "smooth" things out alright. They prevent the
price spikes that would benefit farmers.

The CCA's statements would make sense if they represented the
interests of the beef packers. The CCA fails to acknowledge that, in a
market economy, the interests of buyers and sellers do not always
converge. In that failure, it doesn't represent this cattle producer,
no matter what it claims.

© Paul Beingessner beingessner@sasktel.net

What is Capitalism Without Competiton?

2009-03-16T19:20:00.001-05:00

Column # 711 16/03/09

When farmers worry about their industry, pretty much a full time job
in the last decade, they tend to look for solutions in the areas of
production and marketing. In production, they look at using the latest
technologies and maximizing the value they get from the inputs they
use. They do the latter by trying to use inputs efficiently and by
trying to purchase them at as cheaply as possible. In marketing, they
obviously try to achieve the best price they can with the options
available.

They have a couple problems in both areas. In production, most new
technologies come at a cost. That cost sometimes erases the value of
the gain in production. An example would be the cost of growing
genetically modified crops. In this case, there often is no cost
reduction and no yield gain over conventional varieties. The ability
to use cheaper herbicides, for example, is offset by the cost of
having to buy new seed each year. But at some point, all new varieties
contain the GM traits, so if you want the advantages that might come
from new varieties - increased yield or better agronomic properties -
you have to accept the inability to use your own seed.

When buying inputs, farmers again face the fact that while there might
still be a fair number of retailers, they all sell products from the
same few manufacturers. This is true for machinery and parts,
fertilizers, fuels and chemicals.

Marketing runs into problems as well. On the prairies, we have a grain
industry that has consolidated into just a few firms. Delivery points
have been sharply reduced. Farmers' choices are sometimes limited by
proximity to handling facilities. Livestock producers are even worse
off. All auction barns in Saskatchewan, for example, are controlled by
a single firm, which has raised fees and added new charges since
consolidating its grip on the auction market. The number of feedlots
for cattle is declining. The packing industry in all of Canada is
overwhelmingly dominated by two firms. Cattle prices reflect the lack
of competition.

When farm organizations look at the problems with agriculture, they
tend to have two solutions. The first is the notion that we will be
better off if we can just expand market access. We try to convince
countries to take our GM crops. We look for trade agreements that will
give us market access in other countries. We fight to gain an
advantage in global trade agreements like the WTO. Sometimes these
efforts are successful for a while. After the NAFTA was signed, cattle
numbers soared in Canada because of better access to U.S. markets.

When market access doesn't happen, or doesn't solve the problem, farm
groups have one last solution. They turn to government to fill the
gap. Governments in Canada have done precious little in this area for
some time.

Governments themselves, when faced with the agriculture crisis, seem
to pin all their hopes on the market access side of things. Financial
aid to farmers is always given late and begrudgingly.

But there's something I don't get. We live in a capitalist economy.
Capitalism says the marketplace works when it consists of a reasonable
number of buyers and sellers. A reasonable number of buyers insures
sellers will get a fair price. A reasonable number of sellers means
buyers are not held hostage. In this ideal situation, the system works
pretty good.

The trouble is we don't have that in agriculture. Oh, we have lots of
sellers - eighty or ninety thousand farmers on the prairies. But we
have an ever-decreasing number of buyers. While bad in many
industries, it is likely worst in the cattle industry. When it comes
to inputs, we have lots of buyers, those same farmers, and only a few
sellers. Farmers are on the wrong end of the stick in both cases.

So, here's the part I can't figure out. Why do so many farm
organizations, steeped as they are in the free market, worry so little
about this lack of competition? Without competition, all other
solutions simply don't work. You can expand market access, but if
there are only three companies buying from the farmer and selling to
those markets, they will simply absorb the increased revenues.

The Canadian Cattlemen's Association is an example of this problem. As
I said before, there is no industry as consolidated as meat packing.
Yet, the CCA never seems to worry about this. It had nary a concern
about the recent reduction in meat packers from three to two in
Canada. Nope. If you can believe the Competition Bureau, farm groups
were only concerned about market access. And when confronted with the
anti-competitive aspect of captive supply, the CCA defended the
packers! It said they needed this to ensure they could operate
efficiently. Yet if you search the literature, you can find lots of
studies by economists who document the decrease in cattle prices as a
result of captive supply. Why doesn't the CCA get this?

I don't know an easy way to increase competition in these areas. But I
do know we should at least fight further consolidation. And unless we
recognize the value of competition, make it a top priority, and
pressure governments to recognize this as well, any other gains will
simply be taken from us.

© Paul Beingessner beingessner@sasktel.net

Grain Commission Changes Motivated by Misinformation

2009-03-10T10:29:00.003-05:00

Column # 710 09/03/09

Writing a newspaper column is all about words, obviously. If you write regularly, you learn something about the power words can have to influence people. Politicians know this very well, as does anyone who uses the media to get out a message. When politicians communicate with the public, it is often disrespectfully called "spin". This means taking a situation or event and twisting the message so it communicates what you want it to communicate. We used to call it propaganda, but we only seem to use that word now to refer to things done in other countries. Tin-pot dictators use propaganda. Leaders of upstanding democratic countries use spin.

Some politicians are better at this than others. Some are smooth, some are clumsy. Some mix their spin with half-truths and outright fabrications. Gerry Ritz would fall into this category. He doesn't seem to let the facts get in the way of the issues.

His attempts to defend the changes he is proposing to the Canada Grain Act and hence the Canadian Grain Commission show once again that Gerry went to the Goebbels School of Communication.

Changes to the Canadian Grain Commission have been on the agenda of the Harper government for some time. Bill C-39 was introduced in December, 2007, but died on the order paper when Parliament ended with the election call. Bill C-13, introduced in late February, appears identical to C-39. It calls for an end to mandatory inward weighing and inspection at port, changes the CGC mandate away from its focus on protecting producers and eliminates the need for grain companies to post security with the CGC to cover potential defaults on payments.

These proposals have come under scrutiny from many quarters. Removing the bonding requirement for grain companies has raised red flags with producers, especially in the current unstable economic environment. In defending his legislation, Ritz has played fast and easy with the truth. In an interview with a reporter from Golden West Radio in Altona, Manitoba, Ritz declared that the best that has ever been paid out through the Payment Security Program was 30 cents on the dollar. Because of this, he can easily declare the program is not working.

The only trouble is, he's wrong. The Payment Security Program has actually been quite successful. Over the last ten years, the CGC has issued payments to producers in nine cases of default by grain companies. In six of these, the payment was 100 % of claims. In one, it was 99.8 %. In one, the bankruptcy of Naber Seeds in 2002, payout reached 51.4 % of claims and in the case of Venture Seeds Ltd in 2004, payment was just 28 % of claims. Total payments from the bonding required by the CGC were $4,503,000 to 343 producers, for an average of $13,127 per claimant. The total payouts were actually 77.15 % of claims, not 30 % as Ritz claimed.

In the interview with the Golden West reporter, Ritz also claimed that this protection would only be removed when something better was in place. Again, this is not true. Bill C-13 removes the bonding requirement. Full stop. It does not propose any alternatives and no viable alternatives are on the table.

Ritz went on to claim that the CGC has been under a moratorium for more than a decade (he was likely referring to a moratorium on fee increases) and as a result it is not offering the services it could be. When I consulted an official at the CGC he told me he was not aware of any new services that would be facilitated by C-13. In fact, the recent decision by the CGC to end optional inspection at inland terminals for grain bound for the U.S. came about because the Minister has ordered the CGC to focus on its mandate, and not to perform optional services. The mandate is found in the act and C-13 diminishes, not expands the mandate. The services the Minister is referring to appear to exist only in the Minister's head.

I want to be charitable to Minister of Agriculture Gerry Ritz. He has a reputation for saying things to reporters that, to put it kindly, are creative. I don't think he lies intentionally, as in his claim that payouts through the CGC Payment Security Program have never reached 30 %. But if the Minister doesn't know the facts of the situation, if he hasn't figured out that passing C-13 ends payment security, that there is no alternative waiting in the wings, where does he get his information? If the aides responsible for briefing him are that ignorant of the facts, he should find some new ones. If the Minister himself follows the industry so little that he doesn't remember any of the bankruptcy cases but one, what is he doing in the position?

So, where does Gerry get his information? The Grain Growers of Canada might be one source. In a February 1, 2008 letter to Ritz, the group claimed that "The termination of bonding system, although controversial, will ultimately be a step in the right direction as the bonds to date have not provided proper coverage anyway." Perhaps Ritz took this vague bit of misinformation and simply applied his creative juices. He should try to hang with a better informed class of people.

© Paul Beingessner beingessner@sasktel.net

Waiting for a Miracle

2009-03-09T09:18:00.003-05:00

Column # 709 02/03/09

"All things come to those who wait." I think that saying was meant to
produce patience. Wait long enough, and you'll get what you want. But
it doesn't actually say that. It says all things come, so it could as
easily mean the bad as the good.

Farmers, though, generally take the usual meaning of that expression
to heart. That's why they never tire of referring to their place,
wherever it may be, as "next year country". It implies an eternal
waiting for the bumper crop that evaded them yet another year.

But lest you think that next year country refers to an environmental
or economic condition, I will let you in on a little secret: the
eternal waiting that farmers are fixated on actually arises from their
dealings with government. Farmers are waiting, patiently, for
governments to hear them.

And farmers' patience is admirable. Take cattle farmers for instance.
They've been waiting for the government, any government, to notice
their plight and take action. Some, in fact, have waited themselves to
death, finally leaving an industry they embraced their entire lives
when it became apparent that government also was waiting.

Now, what government is waiting for is anyone's guess. Here's mine:
the province of Saskatchewan was waiting for the problem to go away on
its own, or for the federal government to take the lead. The feds were
waiting for the clock to miraculously wind back to the time before
COOL and Mad Cow, or perhaps for the cattle organizations to come, cap
in hand, begging for help. Both appeared to be waiting for enough
farmers to fall off the bandwagon, that governments built in the first
place, to reduce the number of cattlefolk to a quantity that could no
longer be heard.

Well, the waiting is over. Sort of, anyway. This past weekend, farmers
received two things they were waiting for. One was the Saskatchewan
government's response to the livestock crisis, which came in the form
of a payment of $40 per head for breeding cows and heifers and $20
apiece for market hogs. The second was a ruling from the federal
government's competition watchdog concerning the proposed takeover of
Lakeside Packers by XL Foods.

While the provincial contribution was a feeble imitation of Alberta's
assistance to cattle farmers, it was welcome. Forty bucks doesn't go
very far toward covering the losses cattle farmers are enduring, but
it has to be better than a kick in the head from a cranky cow that you
can't afford to feed. The Competition Bureau ruling, on the other
hand, was a kick in the head from a cow we really can't afford to feed
any longer, since it hasn't produced a calf in years.

The Bureau, you see, decided to allow XL Foods to purchase Tyson-owned
Lakeside Packers. The Bureau's press release provided little detail,
but then, what can you say when you allow a consolidation that sees
two companies controlling virtually the entire beef packing industry
in Canada? As when it allowed Cargill to buy Better Beef in Ontario in
2005, the Bureau seems to believe that access to packers in the U.S.
means competition in Canada is not an issue. The Bureau appeared not
to notice that Cargill is the second largest packer in the U.S. and
unlikely to compete vigorously with itself.

Contrast the ruling by the Competition Bureau with a story from the
U.S. that appeared almost the same day. The Antitrust Division of the
Department of Justice was opposing a merger between two of the four
largest beef packers in the U.S. because it felt that allowing only
three companies to control more than 80% of cattle slaughter would
reduce competition in the industry to unacceptable levels. The
Antitrust division had a lawsuit in progress to stop the merger. The
merger was called off by the companies involved, in the face of
opposition from the Department of Justice and the Attorneys General of
sixteen cattle-producing states.

So how does the competition watchdog in Canada not feel concern about
two packers controlling 95% of beef slaughter here while its American
counterpart has a cow over the notion that three companies would
control 80%?

While you are pondering that, you might ask yourself why both state
and federal governments in the U.S. fought the idea, when provincial
governments in Canada have been absolutely silent. Or why did
organizations like the Canadian Cattlemen's Association and the
Saskatchewan Stock Growers and Alberta Beef Producers appear
unconcerned (silence means acquiescence) when American farm groups
were up in arms?

While you grow old waiting for answers to these questions, consider
one more thing. In a free market economy, you rely on one of two
things to make the economy work. You either must have competition,
real competition, or, where this isn't possible (think railways or
utility companies, for example) you must have regulation to control
anti-competitive behavior. The federal government, and its provincial
counterparts, appears to have abandoned both notions. In the packing
industry, like so many others, we will have neither competition nor
regulation. What we have instead is promises. The Competition Bureau
promises to watch the marketplace and if there is a "substantial
lessening of competition" it says it will take remedial action. It
will, presumably, try at some point in the future to put Humpty-Dumpty
back together again.

Meanwhile, farmers can go back to waiting. It's what they do best.

© Paul Beingessner beingessner@sasktel.net

I'd Laugh If I Could Stop Crying

2009-02-26T03:41:00.002-06:00

Column # 708 23/02/09

It is widely known that the Canadian public has a low opinion of
politicians. The best evidence of this comes not from surveys or
coffee shops but from the low turnout in Canadian elections. Of
course, politicians always try to spin this to suit their purposes.
The winning party claims it is because people are satisfied with them
and see no need to change. The losing party sees it as proof that
people are so fed up with the government they won't stoop to
participating in the process that elects it.

Rhetoric aside, people don't vote because they increasingly don't
think what governments do is relevant to their lives. They are wrong,
but it may be that what governments do today is not as important as
what they don't do. In the last couple decades, governments have
steadily and continuously eroded their own ability to intervene in the
economic and social fabric.

Let me give you a couple of examples. In the United States, a drug
manufacturer is asking to be allowed to use the drug cefquinome
against respiratory infections in beef cattle. Cefquinome is from the
family of cephalosporins, a relatively new family of antibiotics that
is used in humans as a last line of defense against certain
infections. Many medical groups in the U.S., including the American
Medical Association, have urged the U.S. Department of Agriculture not
to license the drug for animal use. The fear is that resistance to
this class of antibiotics could be hastened by using them in
livestock. The response of the USDA has been that the rules do not
allow it to turn down the drug company's request, no matter how
well-founded these fears might be.

The second example is also American. Last year, the Peanut Corporation
of America continued to sell peanuts after salmonella contamination
was found in its processing plant. It did not report this
contamination to health authorities. It seems the Food and Drug
Administration in the U.S. does not have the authority to compel such
plants to turn over their inspection data. One bureaucrat though it
would not be wise to enact such a law because then companies might
simply stop testing!

In Canada, governments have also been quick to limit their own powers.
The issue of competition is a glaring example. Competition is
essential to the working of a capitalist economy. Competition ensures
that no one is gouged and that companies continue to seek out ways to
be more efficient. You would thing that competition would be
absolutely sacred to a free enterprise government. Yet governments
claiming to be devoted to that ideology seem to care little if
effective competition in the marketplace exists.

For example, what farmer would deny that competition in the beef
packing industry is insufficient? With the consolidation of the
packing industry into only three hands in Canada, the farmers' share
of the beef dollar has shrunken dramatically. The National Farmers
Union pointed out the degree of this in a carefully researched study.

Presently, the Competition Bureau is examining a proposed sale that
would reduce the number of major beef processors in Canada to two. The
proposal would allow the sale of Tyson's beef slaughter plant in
Brooks, Alberta to XL Foods. XL already has a significant presence in
Canada in cattle feeding and slaughter, and owns all the major
livestock auction facilities in Saskatchewan. If the sale proceeds,
Cargill and XL would control the slaughter of 95 % of the fed cattle
in Canada. Few reputable economists believe you can have vigorous
competition when there are only two competing firms in the market.

It is likely, however, that the Competition Bureau will allow the sale
to go ahead, if its past track record is any indication of future
actions. It had no qualms about allowing Cargill to buy Better Beef in
Ontario. As a result, Ontario is now the lowest priced market for
cattle in Canada.

The National Farmers Union has insisted that the Bureau make public
its full analysis of the situation so that Canadians can see if the
Bureau's analysis stands up to scrutiny. This too is unlikely if past
behavior at the Bureau is any indication.

Lest you think the Competition Bureau is useless, however, rest easy.
If you are hiring a school bus in Newfoundland, the Bureau is right
there at your side. In a recent ruling, the Bureau found evidence of
price fixing among school bus drivers and companies in Newfoundland.
Other than that, since 2005 the Bureau has never failed to give its
blessing to all and any mergers and acquisitions that came before it.
It allowed appliance manufacturers, drug companies, steel makers,
newspapers, cell phone companies, all and sundry who came before it,
to buy out their competitors. In all cases, the Bureau's response was
the same: "Based on the information available, the Bureau determined
that the proposed transaction would not likely result in a substantial
lessening or prevention of competition in any of the relevant
markets."

There was one exception. In 2005, the Competition Bureau decided that
Johnson and Johnson could not buy out the consumer healthcare business
of Pfizer Inc. without some remedial measures. The reason? Diaper rash
ointment. Johnson and Johnson would have had too big a share of the
diaper rash ointment market. So, farmers need not despair. They will
never be subject to market dominance should there be an outbreak of
diaper rash among their cattle.

© Paul Beingessner beingessner@sasktel.net

Government's Role in Fixing the Mess

2009-02-17T11:45:00.002-06:00

Column # 707 16/02/09

You don't need to be really sophisticated to see that we've messed up
bad as a species. 2008 provided the ultimate proof, if it was needed.
The financial crisis engulfing the world didn't happen by accident. It
was caused by human stupidity, primarily the stupidity of elected
officials who fell for the line that the financial industry was quite
capable of regulating itself into good behavior. Self-regulation. Now
there's an oxymoron if ever there was one. It wasn't so much a case of
the fox guarding the henhouse, as one of expecting the fox to slap his
own paw when he came near the henhouse.

Of course, the financial sector isn't the only one that is
inadequately policed by the people who are supposed to be guarding the
public interest. Consider the case of food safety regulators. Corrupt
and stupid bankers can leave you penniless if left to their own
devices, but corrupt and stupid food processors can leave you dead.

And so it was for the folks who imbibed peanuts in the United States
last fall. Eight of them died, and 19,000 across 43 states became ill
after eating peanut butter and processed foods containing peanuts
contaminated with salmonella. Just as the financial collapse stemmed
from a variety of causes, the peanut debacle points to a host of
structural problems within the industrial food sector.

The most obvious is the lack of adequate regulations. In a twist that
could only have been conceived by a peanut-brained politician, food
safety rules in the U.S. require plants to test for contaminants like
salmonella, but do not require them to inform the Food and Drug
Administration (FDA) or the public if they find them.

In 2004, for example, food processing giant ConAgra found salmonella
in peanut butter from a plant in Georgia. ConAgra was exposed by a
whistleblower from within the plant, but when the FDA asked for the
inspection records, ConAgra refused. The FDA did nothing more, until
three years later when hundreds of people became sick from tainted
peanut butter made at the facility. It then demanded the records,
which ConAgra insisted not be made public.

The peanut scandal in late 2008 came from a plant in Blakely, Georgia
owned by the Peanut Corporation of America. Its abysmal safety record
and failure to disclose again highlights the lack of proper regulation
in the food industry, and the lack of resources to enforce the rules
that do exist.

But it isn't just health regulations that we've messed up royally. The
Peanut Corporation of America only processes one percent of the
peanuts used in the U.S., yet its criminal carelessness affected
people across the continent and around the world. The highly
integrated industrial system that supplies us with food is in itself
part of the problem. Many American companies obtained peanut paste
from Peanut Corp for use in foods of all sorts. The scale of such
plants means that food borne contaminants from a single facility can
reach thousands of miles and affect millions of people. It is the same
with meat processing plants, as people across the world have
discovered. When contaminated hamburger was found to originate from a
ConAgra slaughter facility in Greeley, Colorado in 2002, hundreds were
sickened and 19 million pounds of ground beef were recalled from
across the continent.

At least in the era when packing plants were local, a problem would be
confined to a limited area. Today's massive food processing facilities
can spread a problem around the world in a few weeks.

The financial mess and ongoing food safety issues are two areas that
indicate a sophisticated, highly technological society cannot afford
to push government to a peripheral role. Even the Grain Growers of
Canada finally appear to understand that. In a recent press release,
they called for the federal government to increase its investment in
plant research.

The GGC has never been one to promote government involvement in
anything. Its members are the first to complain about government
"interference" in the marketplace. To its credit in this case, the GGC
recognizes that private companies do varietal and crop research for
their own benefit, not specifically for the benefit of farmers. Thus,
private research is not much interested in diseases or insect pests
that are restricted to certain areas. Not do agronomic questions like
how to reduce input costs concern the agribusiness giants.

Now, if the GGC could see that we've also messed up the system that
transfers publicly generated knowledge into the public sphere. When
crop varieties are developed with public money, we then license them
to companies that restrict their use by prohibiting seed saving and
restrict farmers' marketing options by tying the variety to exclusive
contracts. Fixing this mess-up would ensure that public money really
does benefit farmers.

Fixing the mess we are in means we need to elect politicians who
understand the role governments have to play. We haven't done such a
good job on that either.

© Paul Beingessner beingessner@sasktel.net

Obama Promises Farm Subsidy Caps

2009-02-09T21:04:00.002-06:00

Column # 706 09/02/09

American President Barrack Obama is creating a bit of a stir in
agriculture circles. For one thing, he has indicated he'll bring in a
ban on meat packers owning cattle. This has been a long time on the
wish list of American ranchers, who believe that when packers own
cattle, they are able to manipulate livestock prices to their
advantage. The mechanism is rather simple: when prices are high on the
open market, the packer will dip into his own supply of cattle for
slaughter. The lack of demand in the open market pushes prices down,
at which point the packer returns to the auction house. This
mechanism, along with secret contracts with some feedlots, leaves a
lot of uncertainty as to the true market price for livestock.

But Obama has other ideas to reform agriculture as well. He has stated
that he will impose a $250,000 payment cap on farm support payments to
any individual farm. His policy document puts it like this: "Implement
a $250,000 payment limitation so we help family farmers -- not large
corporate agribusiness. Close the loopholes that allow mega farms to
get around payment limits."

If you want to improve the survival of family farms, a payment cap
makes sense. Handing government money to large farms often simply
finances their next round of acquisitions. Large farms get larger by
buying out smaller ones. Furthermore, it is unlikely that the average
taxpayer wants his tax dollars to carry out the concentration of
agriculture in fewer and fewer hands.

Canadian governments have taken a different view on this. There were
once limits on government payments to individual farms. Back in the
days of NISA and CFIP, the limit was $425,000. I can guarantee that
none of the farmers around here saw that amount of money. Yet, the
provincial and federal minister of agriculture saw fit to raise this
to $975,000 and later to $3 million. I assume that government actions
represent an attempt to achieve some policy goals, but I am somewhat
puzzled as to what rational goal a $3 million cap on payments is
supposed to achieve.

Clearly, payments like this do not go to family farms. Nevertheless,
some farmers have achieved mighty benefits from government largesse. A
look into the Public Accounts of Canada for 2004-2005 reveals that
Pallister Farms of Portage la Prairie, Manitoba raked in $532,728 from
Agriculture Canada's Business Risk Management Programs. Pallister
Farms is owned by well-known free-market advocate and anti-CWB
activist Jim Pallister. Pallister's brother Brian is a three term
Conservative MP from Manitoba.

If Statistics Canada is to be believed, large farms in Canada generate
greater net incomes than small ones. Recent analyses have even pointed
out that there is little sign of a farm crisis on the largest Canadian
farms. In light of this, it seems irresponsible of governments to
spend taxpayers' monies on farms that should not need this.

While we are not exactly in an era of fiscal restraint right now, what
with government throwing money around like beads at Mardi Gras, we
will be at some point when governments recognize that the kitty isn't
limitless. Like all government spending, agriculture will eventually
come under scrutiny, to see if spending is achieving policy goals.
Farmers and taxpayers need to clearly understand what those goals are.
If the government simply wants to heave more money at those who have,
subsidy caps are hardly necessary. If it wants to maintain family
farms of a reasonable size, and ensure a future for family-based
agriculture, subsidy caps make a lot of sense.

In addition to being fiscally responsible, limits on subsidies will
ensure that taxpayers' monies don't simply add to the wealth of
already wealthy companies and individuals.

© Paul Beingessner beingessner@sasktel.net

Cattle Farmers Victims of Joke

2009-02-02T14:01:00.001-06:00

Column # 705 02/02/09

Around the end of December, Saskatchewan Finance Minister Rod
Gantefoer told cattle producers they could expect a belated Christmas
present in the federal budget due in late January. Unfortunately, he
didn't tell them it would be a lump of coal. It was a cruel joke.

The budget has come and gone, its passage assured by the Liberals, but
farmers are still scratching their heads, trying to figure out what
exactly they got from it. Those farmers who raise cattle don't need to
scratch though. They know only too well what nothing looks like. It
looks like what they've been getting when they sell their calves. Now
it also looks like the value of Rod Gantefoer's imagination.

Along with a lot of other Saskatchewan farmers, I haven't been able to
figure out why the federal and provincial governments have been so
unwilling to deal with the crisis down on the ranch. I've written
several columns in the last couple months attempting to point out what
is obvious to everyone, except apparently the politicians, that cattle
folk are gasping their last.

Last week, I had a phone call from a farmer in central Saskatchewan
who took his concerns about his livestock operation to the office of
his MP. After he pled his case on behalf of cattle farmers, she told
him that if there was a real problem, there would be a lot more
farmers at her door. She also told him that the problem was he was not
big enough. He needed to get big or get out.

That farmer's call went some distance toward answering my question. No
doubt this MP was just repeating what she heard around the caucus
table. It explains graphically why the Conservative government in
Ottawa is ignoring the plight of cattle producers: it doesn't believe
there is a structural problem in the industry. The problem is simply
that some cattle producers are too small to be viable.

And if the Conservatives believe this federally, is it fair to assume
the Saskatchewan Party also believes it? Undeniably, they travel in
the same circles. It would explain the province's reluctance to help
its cattle producers and its inability to persuade the federal
government to do so. After all, according to Saskatchewan's
Agriculture Minister Bob Bjornerud, his government has immense clout
in Ottawa due to Saskatchewan's economic status. Bjornerud told a
cattle producer's group in Lloydminster that "I know there's a lot of
turmoil in . the livestock industry but if you could only realize how
much more power we have now when we go to the federal meetings."

The farmer who called me last week was angry. He was angry not only at
the governments he felt were allowing cattle farmers to bleed to
death. He was also angry at the associations that claim to represent
those same farmers, feeling they have done too little and been too
conciliatory to governments that simply ignore them.

He may be right on both counts. It is now too late for many cattle
people. There have been too many years of misery, and too few reasons
for optimism. Many have gotten out, and more are planning on reducing
herds to their minimum. The ones who are left don't need vague
promises from Gerry Ritz or his provincial counterparts. They need
money - money to buy feed, money to replace the losses from calves
they feel were stolen from them by the packers. In the longer term,
they need a competitive feedlot industry and a competitive packing
industry. Giving $50 million dollars to the existing packers, as the
federal budget promised, will not provide this.

The only optimistic news on the cattle front at this point comes from
an unlikely source. Newly-elected U.S. President Barrack Obama said
recently that his government was committed to eliminating packer
ownership of cattle. These so-called captive supplies have allowed
packing houses to manipulate cattle markets for decades. They have
been criticized ferociously by American ranchers, who have long
demanded what Obama is now promising.

If the Democrats take this step, and given the lobbying strength of
Cargill and Tyson that is a big if, it may open the door for the
Canadian government to at least contemplate such a move. Mind you, it
would be a big help if Canadian livestock organizations would follow
the lead of the National Farmers Union and actively call for the same
measures here. It might even restore the faith of my caller from
central Saskatchewan.

© Paul Beingessner beingessner@sasktel.net

What To Do With Sixty-Nine Million

2009-01-27T12:32:00.002-06:00

Column # 704 26/01/09

When the railways collected sixty million dollars more than the
revenue cap allowed in 2007/08, they were gambling on their ability to
have their way with the Canadian Transportation Agency. The Agency had
been charged with determining how much money the railways were
spending on maintaining the fleet of government-owned hopper cars.
There was good reason to believe the amount was far less than the
railways had collected for this through their freight rates. If so,
the extra would be taken off the total of the revenue cap.

The dilemma for the railways was this: if they reduced freight rates
to stay under the revenue cap, and the Agency ruled against them,
there was no problem. But if they reduced rates and the Agency ruled
in their favor, they would be out the money they could have charged.

The railways must have known, despite their confidence in their
lawyers' abilities, that they would lose at the CTA. After all, they
really hadn't spent the money on the rail cars, and everyone knew it.
It would be no big deal to have to pay back the money they over
charged. After all, they would have the use of it for many months. But
the penalty, which at 15 percent came to $9 million, would be another
story. No railway wants to give up millions.

In the end, they appear to have rejected the prudent course and chose
instead to gamble on their own persuasiveness. They lost, and farmers
ended up the winners. Sort of, anyway. Of course, of the $69 million
the railways have to pay back, $60 million should never have been
charged. The $9 million penalty is the good news.

True to form, farmers have taken to arguing about what should be done
with the money. Federal legislation says it is to be paid to the
Western Grains Research Foundation, to be used for research. The WGRF
puts such monies into a trust fund and takes the earnings to fund crop
research.

The legislation hardly contemplated such a huge claw back from the
railways. In fact, those government bureaucrats who crafted the
revenue cap maintained the cap would scarcely be a factor since
intense competition between the railways would occur when the
individual regulated freight rates were converted to an overall cap.
Instead of this intense competition, the railways have maintained
freight rates as close to the maximum allowed as they possibly could.
Admittedly, this year's large overage was a result of a one-time
factor, and won't likely be repeated.

The large amount has made farmers and farm groups take notice. While
some are happy to see the boost given to crop research, others, like
the Western Canadian Wheat Growers, want the money returned to
farmers. There is some merit to the argument that farmers should never
have paid it, and should get it back. But the devil is in the details.
How do you determine how much each should get? Should a farmer in
Lethbridge, whose freight rate is half that of a farmer in Nipawin,
receive as much on a per tonne basis? How exactly do you determine
what freight was paid on open market crops, when the farmer doesn't
know the destination or final use?

One positive aspect of the debate is that it has reminded farmers how
necessary crop research is. Even the Grain Growers of Canada, a group
that usually trumpets the advantages of private enterprise controlling
all aspects of agriculture, has said we need more money poured into
Universities and government research stations. It also admitted that
seed companies don't do much of the agronomic research that farmers
need as badly as they need new varieties.

Maybe it's not such a bad thing if the money stays with the Western
Grains Research Foundation. But developing new crop varieties is only
part of the equation. Making those affordable for farmers is another.
And when seed canola hits over $300 a bushel, you have to think
something is wrong. That something is the way public money is used to
develop crop varieties that are then locked up with Plant Breeders
Rights and turned over to the private sector seed companies. These
companies in turn force producers into contracts that restrict seed
saving and impose conditions on marketing the crop. Many of the
advantages brought by a new variety are lost to farmers because of
this.

I would cast my vote in favor of money going to the WGRF on one
condition: that it take a few hundred thousand and invest in a study
that would determine the benefits to farmers if the WGRF adopted the
model employed by the Saskatchewan Pulse Growers. The SPG does not
allow Plant Breeders Rights to be taken on varieties developed with
farmers' money. It has worked well for them for decades.

© Paul Beingessner beingessner@sasktel.net

Banish the Idea of Unfettered Capitalism

2009-01-25T12:57:00.000-06:00

Column # 703 18/01/09

A recent editorial in the Western Producer, western Canada's largest
weekly farm paper, encouraged readers to "banish romantic ideas of the
small farm". While it seems to be a critique of very small farms in
poor countries, it implies that North American romantic notions about
small farms also constitute some kind of danger. It then tries to link
that romanticism with the situation in Africa and the Ukraine, where,
according to the editorialist, small farm size is preventing
agriculture from progressing.

Perhaps the problem I had with the editorial came from its lack of of
clear definitions. What exactly constitutes a small farm? What type of
progress does it forestall?

In North America, one of the most romanticized types of farming is not
the small farm, but rather the cattle ranch. Witness the periodic cult
popularity of "cowboy" costumes on the streets of major North American
cities, and the continuing fascination with "western" movies and TV
shows such as Heartland and Wild Roses. But cattle ranching is surely
on the ropes, as any cattleperson can tell you. Should we stop
believing in the romantic notion of the Marlborough Man - minus the
cigarette?

The history of western Canadian agriculture, brief as it is, tells us
that today's large farm is tomorrow's small one. When my grandfather
came here in 1905, a half section was a good sized farm. In my
father's time, two sections made you exceptionally large. When I began
farming it was three. Now? A large farm in our area could be anywhere
from eight to sixteen sections. Do we celebrate the fact that national
and global economics has forced us to the point where we need to farm
half the country to be viable? If you don't want to romanticize small
farms, but you want to romanticize something (where would we be
without some myths?) you will need to be able to hit a moving target.

Or should we try instead to romanticize the notion of serfdom, since
that is increasingly where agriculture is headed. If you doubt that,
ask the contract growers of turkeys, chickens and hogs in the U.S.

I could agree with the thesis of the editorial, that there should be
no romance in a small farm, if I thought a romantic notion was somehow
guiding government policy. That would be a mistake. But we are far
from that. What has guided government policy for at least three
decades has been the hallucination of Sammy Watson and his successor
clones - that there are too many farmers, always too many farmers.
This is indeed a policy, but it is hardly a vision. We haven't had a
vision for agriculture at the national or provincial level for at
least three decades.

Of course, the editorial was really a lead into a story about the
state of agriculture in the Ukraine. Here, farms too small to be
viable in an industrialized economy are the legacy of the end of the
Soviet Union.

But in much of the third world, small farms are not only appropriate,
but far better than the alternative - which is to become the poorest
of the poor in the cities, and to go from some measure of food
security to food insecurity. Nor are small farms intrinsically
unprofitable. In the early 1990's small cotton farmers in some of
Africa's most impoverished countries earned a substantial living. A
farmer in Mali, one of the ten poorest countries on earth, earned
about $1000 a year growing cotton. This was three times the national
average income. The foreign currency earned from cotton exports
provided Mali with money for health care, education and development.

When the U.S. government ramped up cotton subsidies to American
farmers in the years that followed, and to companies processing and
exporting cotton, the result was overproduction in the U.S. and a
crash in cotton prices. Small farmers in Mali did indeed end up in
poverty - not because their farms were too small but because ours were
too big and too powerful- at least where it came to obtaining
government handouts.

I wouldn't worry about the romanticizing of small farms. If you want a
romantic idea to banish, how about the romantic idea that companies
can self-regulate. Or the belief that the unrestricted, unencumbered
marketplace will bring prosperity to all. Or the idea that people who
run big companies (into the ground) are such geniuses they deserve to
become billionaires. What those romantic notions and the policies they
drove brought us was Enron, WorldCom, AIG, the Ponzi schemes of Bernie
Madoff and ultimately near economic collapse.

Worry too about the romantic notion that we will cure this recession
with more of the same - the "hair of the dog that bit you" school of
economic theory.

But leave the small farm alone. Is it so bad to be romantic for a time
when the country was full of people, when small towns were the
cultural, social and business hubs of the prairies? The present state
of rural Canada is surely not one to celebrate unreservedly. At least
not for this romantic.

© Paul Beingessner beingessner@sasktel.net

Seed Industry Wants Taxpayers to Fund Certified Seed

2009-01-14T03:45:00.002-06:00

Column # 702 12/01/09

In December, 2008 the Canadian Seed Trade Association made a proposal
to federal Finance Minister Jim Flaherty that would give farmers a
greater incentive to use certified seed. Currently, the use of
certified seed in Canada varies widely from one crop to another.

For those not familiar with the CSTA, it is composed largely of
companies that sell certified seed, as well as some that do plant
breeding, like Monsanto and Pioneer Hi-Bred. It also includes seed
grower organizations like Secan and a small number of farmer groups
like the Saskatchewan Pulse Growers. Associate members to CSTA are
diverse. Among others, they include Manyan, a producer of jute bags,
and Agro Protection International Inc., which is described on the CSTA
website as "high-level investigative and evidence-gathering services".
Agro Protection International Inc. does not have a website but I
suspect that those farmers who've run afoul of Monsanto's seed patents
will be acquainted with the work of this company.

The CSTA proposal asked that farmers who use certified seed be given a
special deduction from income tax. Specifically, purchases of
certified seed would qualify the farmer for an expense item equal to
1.55 times the actual cost of the seed. According to the CSTA, that
would make the cost of using purchased certified seed about equal to
the cost of using one's own saved seed. The CSTA estimates that
increasing certified seed use from the current 30 percent to 50
percent would cause the government to forego about $90 million in tax
revenue.

In describing the benefits it believes would flow from such a move,
the CSTA says that increasing the use of certified seed would, among
other things, increase the amount of private research into plant
breeding. It claims that private sector research is highest in crops
where the most certified seed is used. It notes that canola, where 92
percent of seed is certified, receives 74 percent of private sector
investment. The CSTA also quantified the amount of money invested in
private sector research by its members at $56 million in 2007. It says
the private sector plans to "almost double" this amount over the next
five years.

There is no doubt the CSTA quest to increase the amount of certified
seed farmers use is self-serving. Members of CSTA, mostly companies
that sell seed, stand to benefit greatly if farmers can be cajoled,
compelled or incented to buy more seed and use less of their own crops
for seed. The CSTA has had several proposals in the past aimed at
achieving the same end. These have included the suggestion that
farmers who use certified seed should qualify for reductions in crop
insurance premiums and the idea that the need for Kernel Visual
Distinguishability (KVD) could be eliminated if farmers used certified
seed exclusively.

The CSTA maintains that there would be great benefits to the Canadian
economy if their tax incentive scheme were implemented. It says
farmers would benefit because new varieties would give higher yields,
greater disease and insect resistance and better response to inputs.
Processors would benefit from having better quality crops to process.
Consumers could have a healthier diet, and society as a whole would
benefit from a reduction of tillage and reduced use of pesticides and
fertilizers.

Some of these claims are difficult to quantify, and CSTA offers scant
evidence for the notion that new plant varieties are giving us
healthier consumers. (While you can't necessarily blame it on plant
varieties, today's consumers are obese, and largely less healthy than
a generation ago.) Also, claims that new varieties reduce overall
pesticide and fertilizer use have yet to be proven.

The CSTA proposal is part of an overall strategy to reduce farmers'
ability to save their own seed. CSTA has developed this strategy,
quite simply, because farmer use of certified seed only occurs where
choices are limited and where farmers perceive real benefits. For
example, farmers use mainly certified seed of canola because they
believe there are benefits to using herbicide tolerant varieties. If
they could get these without a contract binding them to buy certified
seed, they would save their own. With some crops, corn for example,
certified seed use is high because the varieties are largely hybrids
that do not breed true from seed.

With most cereal crops, like wheat, oats and barley, farmers save
their own seed because they don't believe the use of certified seed
provides enough benefits to offset the costs. If this is wrong, the
CSTA might be better off to show farmers the data that prove the
benefits. It is noteworthy that a tax incentive only helps farmers if
they are profitable. In a year where they lose money, the added cost
of certified seed would be just that - an added cost. The seed
industry might counter that there is a production benefit to using
certified seed. If so, show us the research and convince farmers. Then
they will buy your seed.

The CSTA is correct in saying we need more money going to plant
breeding. But its proposal would take $90 million a year from tax
revenues and return it to seed growers and seed sellers. This is twice
the entire amount spent by CSTA members for plant breeding. If the
government is going to "spend" that money, wouldn't farmers be better
off if the government invested $90 million directly in public plant
research, rather than see some small portion of it trickle through the
pockets of seed companies to their research sides? This would be a far
more efficient use of taxpayers' money.

© Paul Beingessner beingessner@sasktel.net

Governments Need to Decide on Livestock Support

2009-01-06T16:00:00.002-06:00

Column # 701 05/01/09

God help the beleaguered cattle producers of Canada! As prices
plummeted like the proverbial stone in 2007 we were told it was
because of the high cost of feed grains and the soaring Canadian
dollar that briefly took on the American greenback and pummeled it.

Now the situation is nearly the opposite. Feed grains have tumbled and
the Loonie has resumed it humbled position beneath the feet of the
American eagle. But bad as cattle prices were then, they are worse
now. So, what's up with that?

One major difference is the American's implementation of Country of
Origin Labeling. COOL has scared most American packers off processing
Canadian beef, and this is now considered an important driver in the
downhill slide. It should also be noted, though, that cattle prices
have been more or less continuously falling since 1989, as an
excellent report by the National Farmers Union recently pointed out.

The inevitable outcome is a drop in Canadian cattle numbers as farmers
cull older cows and reduce replacement heifer numbers. Last July,
Statistics Canada released data that demonstrated this. Where the
losses are taking place is interesting. Overall, Canada's beef cow
herd shrank 4.7 percent from July 2007 to July 2008, but the pain was
unequally spread. Manitoba lost 1.8 percent, Saskatchewan dropped 4
percent, Alberta tumbled 5.8 percent and B.C's relatively small herd
fell by nearly 12 percent. Eastern Canada did not fare quite so badly.
Ontario's beef cow numbers declined 3.3 percent and Quebec lost less
than 1 percent.

The smaller declines in Ontario and Quebec may be a result of the much
larger domestic market in those provinces. Western Canada needs to
export much more of its beef production due to larger numbers of
cattle and a smaller population.

While the cattle industry wallows in misery, the federal government
has offered it a teaser. Finance Minister Jim Flaherty made a cryptic
reference to the problems in the livestock industry during a meeting
with provincial finance ministers. It was enough to inspire
Saskatchewan's finance minister Rod Gantefoer to offer his own teaser
- farmers should look to the upcoming January 27 federal budget for a
late Christmas present. Alberta's government didn't wait for the feds
to move. Alberta brought out a substantial assistance package for
livestock producers months ago.

Governments should indeed act. Livestock producers are losing equity
daily while they maintain their herds. Governments, both federal and
provincial need to decide what they want for a livestock industry. If
cattle producers are left to their own devices, the industry will
indeed shrink far more yet. If this is the decision of governments,
that the industry must shrink to meet the new reality, they should
immediately make that clear to producers so they can exit before they
consume their equity in a futile waiting game. Let them get on with
it, break up their pastures and hayfields and produce the annual crops
that are more profitable (I'm trying to keep a straight face as I
write that last sentence, given recent grain prices). Better yet,
provide a program to let producers exit the industry with dignity and
the cash to transition to something else.

But if governments support the industry, what is the endgame? Would it
be done with the belief that markets will one day turn around and the
industry will be there to take advantage of them? This is a pathetic
strategy at best.

One strategy, advocated by the NFU as one part of its overall plan to
revitalize the livestock sector, is to decrease the cattle herd to one
that matches domestic consumption. To many, that would be a hard pill
to swallow. Charlie Gracey, longtime observer of the cattle industry
in Canada, called this idea unthinkable. It would certainly mean a
reduction in the number of feedlots in Canada, and a shift out of feed
grain production in some areas. For ranchers, the decision to downsize
is often very hard, as the idea of being more profitable with fewer
cows seems counterintuitive.

A smaller industry makes sense though. Since current returns on calves
barely cover variable costs, a positive return on fewer calves would
have to look better. Fewer acres of pasture and hayland would be
needed for a smaller cowherd, but farmers could use these surplus
lands to background their calves, rather than selling them at weaning.
This would bring an even greater return per calf and provide less
disruption to cropping and land use patterns.

Much more would be needed to make this situation feasible, and the NFU
report contains many ideas. One thing is sure. If our governments,
provincial and federal, have a better idea, they should say so soon.
Canada's hard working cattle people deserve to know where they stand.

© Paul Beingessner beingessner@sasktel.net

Gifts of Another Kind

2009-01-06T15:49:00.002-06:00

Column # 700 22/12/08

I don't usually write a Christmas column. Well, I usually write one
around Christmas time but I don't recall ever having written one with
a Christmas theme. It turns out, though, that this week's column is
significant for two reasons. It coincides with Christmas, and it is my
seven hundredth column, so I've decided to break with my tradition and
do a Christmas theme. After seven hundred weekly columns, I figure I
should be able to do whatever I darn well please - at least this once.

I haven't neglected Christmas due to some enmity toward the season.
Quite the contrary. I like Christmas a great deal. In my small farming
community, we still celebrate a very traditional Christmas, with a
community Christmas party, complete with a play presented by the young
folks in the area. We still go to church on Christmas eve or Christmas
day, and we have a whopping huge dinner with turkey, potatoes and
gravy, and not a speck of tofu in sight.

We also do presents, though the season of consumption gets awfully
wearying. The older I get, the less I want to receive more stuff.
Christmas being a time of giving, we try to send off a batch of
cheques to charities that we support. The relative success of the year
on the farm determines the size and number of those cheques.

Presents that involve laying out cash aren't the only type, however.
There are presents I would love to give, but money simply can't buy
them. It doesn't prevent me wishing, though, and if I could, the
following is a list of gifts I would give to some significant folk in
Canada.

To Prime Minister Steven Harper, my gift would give a better
perception of democracy. The PM seems to have inverted the usually
definition. He believes that the only valid government is one that is
elected by a third of the people. Hence a coalition elected by two
thirds of the population is invalid in his mind. This odd view of
democracy explains his position on the Canadian Wheat Board. Since
eight of ten farmer-elected directors support the single desk, Steven
believes it is illegitimate. The other 20 percent of directors
represent, in Steve's mind, the majority of farmers. Remember the song
about cowboy logic? This is Harper logic at its best.

To Michael Ignatieff, the new leader of the Liberal party, I would
give mass amnesia across western Canada. Ignatieff says he wants to
regain the trust of western Canadians. The quickest way to gain the
trust of the agriculture community would be for that community to be
stricken with a massive and overwhelming epidemic of amnesia that
would cause it to forget the Liberal years with Lyle Vanclief as
Agriculture Minister. Since the Liberals forgot about western farmers
during their long reign, it seems only mass amnesia will allow us to
forget their legacy.

To Jack Layton, federal NDP leader, I would give the ghost of Tommy
Douglas to be his speech writer. Maybe then Jack could overcome his
reputation as Canada's most boring political leader.

To Saskatchewan Premier Brad Wall, I would give a cow. Actually, a
whole herd of cows. Brad, you see, has never heard of cows himself. At
least that is the conclusion I've come to, considering that he is
oblivious to the pain in the farm community caused by cattle prices
that seem to have no up-side. Brad can have my cows, provided he puts
that large brain of his to use figuring out a way to make them
profitable.

For CN and CP, Canada's national railway monopolies, I would give a
winter with no snow in the mountains, no cold on the prairies and no
excuses. (Don't hold your breath waiting for any of those.)

And for Western farmers, a return to the good old days of, say, early
2008. Remember? It was that brief period when prices were high and
hopes were higher?

And finally, for the readers who have long endured my columns, I give
my thanks, for all your support, your criticism, your comments and
your friendship. You have given me the encouragement to continue, at
least for another seven hundred. Christmas blessings to you all.

© Paul Beingessner beingessner@sasktel.net

Government Bailouts Bypass Livestock Producers

2009-01-06T15:43:00.003-06:00

Column # 699 15/12/08

Cattle and hog producers watching the growing list of industries
slated for infusions of cash by the Canadian government must be
wondering what they have to do to convince politicians of the worth of
their industry. In addition to promising aid to the Canadian auto and
aerospace industries, Canada's free enterprise government is now
talking about assistance for the forestry and mining industries.

Livestock industries? Well, no. With the exception of Alberta throwing
a whack of money at its cattle farmers, other provinces and the
federal government appear ready to turn a blind eye to an industry
sinking into the ground.

It's interesting to compare the situation of livestock producers to
that of auto workers. The auto industry in Canada exists largely
because of a trade agreement with the United States, known as the Auto
Pact. It shifted some auto manufacturing from the U.S., where most of
Canada's cars were made, to Canada, mainly Ontario. The Pact required
that for every car sold in Canada, one had to be built here.

The cattle and hog industries in Canada, with their present levels of
production, exist largely because of the North American Free Trade
Agreement. Prior to this, Canada's beef industry was mostly sized to
fit domestic needs and the hog industry was similarly small. When
Canadian livestock were allowed into the U.S. tariff-free, our
production began to grow. That was further accelerated by poor grain
prices in the 1980s and 90s. Marginal lands were converted back to
grass and feed grains were cheap.

Both industries are in huge trouble today, and the government is
bailing one of them out. Guess which one?

So why do provincial and federal governments in Canada see the auto
industry as worth saving and the livestock industry as so much waste
to flush down the toilet? The answer may lie in location and politics.
The auto industry in eastern Canada means seats for any government
that wants to rule or keep ruling. Ontario voters will go Liberal,
Conservative or even NDP at the drop of a hat (or a dollar). Western
voters, particularly rural ones, vote Conservative no matter what. The
federal government seems totally uninterested in agriculture, with the
exception of dumping the Canadian Wheat Board. Equally, in
Saskatchewan, the governing party seems assured of rural votes. In
return, it is ignoring Saskatchewan's large livestock sector.

Here's the awful irony. When the Liberals ruled Canada from an eastern
base, they ignored western agriculture. Commentators would often say
we should not expect good treatment from a party we refuse to vote
for. Now the party we vote for is in power, and we still get nothing
because they expect we will always vote for them.

The same dichotomy seems to be playing out in Saskatchewan. The NDP
was largely estranged from rural Saskatchewan during its long reign.
Now the Saskatchewan Party, solidly entrenched in rural Saskatchewan,
categorically says it has no help for the livestock industry. (And the
Saskatchewan Stock Growers Association president Jack Hextall says,
darn it.oh well.okay.)

The exception to this perverse rule is Alberta. The reigning
Conservatives have doled out big bucks to the livestock sector to keep
it afloat.

To compound the situation, it is unlikely that pouring money into this
industry would do much good in the long run anyway. A recent study by
the National Farmers Union shows that livestock returns, which were
relatively constant for many decades, took a tumble with the advent of
NAFTA and the consolidation of the packing industry. The example of
calf prices illustrates this. Prices for 500 to 600 pound calves today
are just over half their 1942 to 1989 average.

So, following the advice of governments and the economic dictates of
the time, farmers increased livestock production and packers
consolidated. When the system fails, as it has today, governments are
quite prepared to dump the farmer. But then, that has been the way of
thinking in government for a long time. Farmers are the problem, the
solution is to get rid of more of them and leave only the efficient.
It's so much easier than challenging the conventional wisdom about
business and trade.

© Paul Beingessner beingessner@sasktel.net

Farmers Show Strong CWB Support in Director Elections

2009-01-06T15:37:00.003-06:00

Column #698 08/12/08

One of the most contentious CWB director elections to date ended on
Sunday, with a result sure to have the federal government gnashing its
teeth. Supporters of the CWB's single desk won four out of five of the
districts holding elections. The exception was District Two, in
Alberta. Three of the five elected directors are new to the board, as
incumbents in these three districts were not eligible to run again.

In the four districts that elected CWB supporters, the margins of
victory were large, with 60 percent of voters, on average, voting for
single desk supporters. The largest margin fell to Bill Woods, in
District Four. This was formerly held by Ken Ritter, who could not run
again. Significantly, the two Conservative MPs whose ridings cover
most of District Four are Agriculture Minister Gerry Ritz and David
Anderson, the MP with responsibilities for the CWB. Both Anderson and
Ritz have been vocal and aggressive opponents of the CWB, claiming
that their own electoral victories showed that farmers want to see the
single desk eliminated.

Woods took the district on the first ballot, with 63.4 percent of the
vote. Wood's main opponent, Sam Magnus, held several positions with
the federal Reform and Conservative parties, including a stint on the
national council of the Conservative Party. Magnus' status within the
party didn't help him much as he garnered only 28.5 percent of total
votes. If Ritz and Anderson have a vestige of honesty, these MPs will
drop the pretense that their schemes to neuter the board are supported
by a majority of farmers.

Several other points stand out from the election. The Conservative
government continued its overt interference in the election, including
pruning the voters list further and sending letters to a select group
of farmers, telling them how they might obtain ballots.

The culmination of government interference came when five prairie MPs
used their parliamentary expense accounts to send personal letters to
farmers on the voters list, telling them to vote for anti-single desk
candidates. One of these MPs was David Anderson. As Wood's substantial
victory demonstrated, this strategy failed miserably. Hopefully, when
Parliament resumes in January, in whatever form it might take,
Anderson will be required to account for this misuse of Parliamentary
money, and to explain how he acquired the voters list. That list is
supposed to be confidential to the candidates.

Another of the four MPs, Andrew Scheer of Regina-Qu'Appelle, used his
expense account to send a personal attack on re-elected CWB director
Rod Flaman. Flaman was Scheer's Liberal opponent in the federal
election. Scheer claimed that Flaman "shamelessly shirked his
responsibilities to the farmers who elected him and spent the last
year campaigning for federal office while collecting his CWB pay
cheque".

Apparently farmers trusted Flaman more than they trusted Scheer, whose
closest connection to agriculture is being an insurance salesman in
Regina. Flaman won the district with 60.3 percent of the vote on the
third ballot.

Currently, the CWB board consists of fifteen directors, with ten
elected by farmers and five appointed by the federal government. Eight
of the ten farmer-elected directors support the single desk, but the
directors appointed by the Conservative government in Ottawa line up
directly with the government in its opinion of the CWB. The very
strong showing by pro-CWB candidates calls into question the
legitimacy of the directors appointed by the government. Clearly they
do not represent the wishes of farmers who want the CWB to continue
its current mandate. As such, their role at the board table should be
minimized to any specific areas of expertise they might have.
Obstruction is not considered an area of expertise.

On a positive note for those candidates who were defeated, the
Saskatchewan government seems to have a home for anti-single desk
defeated candidates in Enterprise Saskatchewan. The Agriculture Sector
Team has a couple on its board, including the chair, Gerrid Gust.
While the province has aligned itself with the federal government's
anti-board stand, maybe it's time for the Saskatchewan Party to
reconsider its support of a position farmers' clearly do not support.

On a final note, the rate of return of ballots reached 54 percent, a
very good return for a mail-in ballot. The Conservatives have yet to
find a way to manipulate the voters list that will give them the
result they want.

© Paul Beingessner beingessner@sasktel.net

Viterra's Marketing Fellow Criticizes CWB

2008-11-28T00:42:00.001-06:00

Column # 696 24/11/08

In the last week of the CWB director elections, the C.D. Howe
Institute issued a brief report arguing that the Canadian Wheat Board
does not do a good job marketing prairie grain. The main author of the
report is a University of Regina assistant administration professor,
Sylvain Charlebois.

The basis of the report was sharply criticized by the CWB. Ian White,
appointed CEO of the CWB by Stephen Harper, was blunt, "Farmers are
not well served by another report based on false assumptions and
oversimplified numbers."

In the never-ending line of studies for and against the CWB, it is
always interesting to look at the bias brought to the table by the
authors. In Charlebois' case, it is worth noting that he is not much
in favor of marketing boards of any type, having argued that Canadian
consumers and Canadian farmers are badly served by supply management.
(Supply management is a system that controls production in Canada of
dairy and poultry products, in order to allow farmers to make a decent
return from these industries.)

The C.D. Howe Institute, which commissioned Charlebois' study, is a
well-know think tank on the right wing of the political spectrum. It
has advocated for, among other things, the privatization of Canada
Post and a tax on Canadians based on their use of the medical system.

Charlebois' methodology in examining the CWB's performance is
problematic, but it may stem from a failure to understand the Board
and its function. In his opening paragraph, Charlebois describes the
CWB as "the sole buyer of Western Canadian wheat and barley". The CWB
is, in fact, a seller of wheat and barley on behalf of Canadian
farmers. Nor is the difference just a matter of language. A buyer pays
you for a product, markets it for a higher price and keeps the
difference as his margin. The CWB returns all monies from the sale of
farmers' wheat and barley to the farmer, minus selling and
administration costs.

In a brief review of some of Charlebois' other work, I found a similar
lack of care with language. In a 2007 paper on food borne illnesses,
he says, "While our food has never been safer, and is among the safest
in the world, we cannot deny that foodborne illness is a significant
public health issue for Canada. We estimate that one in three
Canadians gets sick from food poisoning every year."

But where, for an academic who should steer clear of unproven
statements, is the evidence that "our food has never been safer"?
Especially in light of Charlebois' statement that one in three
Canadians gets sick from food poisoning every year. If this is safe,
how bad would unsafe look?

In Charlebois' CWB study, he compared elevator prices in Montana to a
now defunct CWB program called the Daily Price Contract. He claims to
show that Montana farmers received better prices for grain than
Canadian farmers near the border. Problems with his methodology are
legion, but the most glaring is the assumption that American farmers
actually receive posted elevator prices. In the 2007/2998 crop year,
which Charlebois refers to, American farmers sold almost all their
wheat and barley early in the crop year, responding to what seemed
like high prices. Prices went much higher later on, largely because
U.S. farmers had no wheat to sell! Yet Charlebois assumes these prices
were achievable and fails to understand they would never have existed
if there was grain available in any quantity.

He also assumes that all Canadian grain could be sold for these
prices. In fact, only ten percent of our grain is sold to the U.S.
Eighty percent is sold to a variety of overseas markets, few of which
are as high priced as the U.S.

Charlebois' opposition to the CWB is known. Earlier this year, he
declared that, "The monopoly of the Canadian Wheat Board on the sale
abroad of barley and wheat should end. The current structure and
organization of this organization are incompatible with the economy of
the twenty-first century."

What is less well known is that Charlebois is the "Viterra Marketing
Fellow" at the University of Regina. Viterra, of course, is the grain
company that declared it would do better if the CWB were to lose the
single desk. Now the lack of rigor in Charlebois' study becomes more
interesting.

© Paul Beingessner beingessner@sasktel.net

Land Speculation Rises With New Found Wealth

2008-11-28T00:34:00.002-06:00

Column # 695 17/11/08

I have never been a big fan of speculation, especially the kind that
drives up the price of things I need. Speculation is generally carried
out by folks with more money than they need looking for a place to
park it that will generate a bigger return than they can get in normal
investment activities. Speculators are different from investors in one
important way, though the results of their activities can often be the
same.

As I see it, a speculator is someone who jumps into a market they feel
is undervalued with the intention of making a quick buck when the
market begins to climb. A recent example would be the increase in
housing prices in Saskatchewan. Some of it resulted from the
province's economic boom, but a great deal came from out-of-province
speculators who saw the chance for a quick gain. Interestingly, if
there are enough speculators in the market, it becomes a
self-fulfilling prophecy. The attention to the market causes it to
rise, based on the anticipation of price increases.

Unlike speculators, investors might actually do something useful. A
friend of mine buys old houses, and lives in them while fixing them
up, then sells them at a profit. He is investing in the house, while
doing something to increase the value. He isn't just speculating.

Farm land prices have also risen lately, much of it based on
speculation. Rising commodity markets, especially those for food,
caused some speculators to conclude that farmland would be a good
place to park money. Higher crop prices would surely translate into
greater profitability from owning land. While this might be
pollyanna-ish, it does have the result of increasing the price of land
for legitimate farmers who wish to buy. When crop prices again fall,
the viability of the farm might come into question.

The havoc that speculation can play with farmland prices is one reason
many governments throughout modern history have restricted farmland
ownership to their own residents. While the problem in Canada might be
quite localized - restrictions have at times kept people from buying
land in other provinces - there is a whole new level of speculation
and investment occurring across the globe. This involves national
governments and private companies buying vast tracts of farmland in
other nations, in an effort to secure future and present food
supplies. Among these are China, Japan, Korea, Egypt, India and many
of the oil-rich Gulf states.

It has resulted in some strange and disturbing situations. For
example, countries such as Korea, Qatar and China are seeking land in
Cambodia to grow rice for export to their own countries. The Hun Sen
dictatorship in Cambodia is willing to oblige, while millions of
Cambodians struggle with malnutrition. Equally disconcerting, the
government of Jordan is cultivating land in Sudan to produce food to
ship back to Jordan. Sudan, of course, is home to one of the largest
and longest running famines in recent history - that of the Darfur
region.

There is some argument to be made that investment by these relatively
(and sometimes absolutely) prosperous countries will increase food
production and efficiency in less developed nations. But, depending on
the country, it is also possible that most of the benefits will accrue
to the investing nation. In the Sudan, ninety-nine percent of the land
is owned by the government, a government that cares little about a
substantial part of its population. It may simply use revenues gained
to further oppress those already in dire straits.

Private companies that see the opportunity to invest in land have
little interest in the welfare of the country that opens its doors.
There goal is to cash in on rising prices.

Furthermore, this "investment" by other countries and private
companies is aimed at moving food out of the producing countries. It
is hard to defend food exports from countries that face massive food
deficits in their own populations. It smacks of a return to the
plantation era where land and food production accumulate in fewer and
larger hands while former landowners become low paid serfs on the land
they once owned. Their own food insecurity can increase substantially.

There is an argument to be made for foreign investment in agriculture
in developing countries. But Jacques Diouf, the director-general of
the Food and Agriculture Organization at the UN thinks it is a bad
idea for foreign investors to buy a bunch of farmland. He feels it
might create a backlash in local populations that would result in a
halt to all agriculture investment. And well it might, and perhaps it
should, if the only result is to move food to countries that should be
able to pay for it on the world's markets.

© Paul Beingessner beingessner@sasktel.net

Support Our Food Providers

2008-11-15T02:12:00.005-06:00

I can only second Paul's request that you contribute to his CWB election fund.
His election could be essential to the survival of the Canadian Wheat Board.

The Harper government, despite the refusal of Canadans once again to give it a majority government, has still not given up it's campaign to eliminate all of our social protections fought for so hard over the years such as the Canadian Wheat Board and Medicare to the not-so-benign interests of free-booter US corporations. U.S. voters in the recent election also wisely gave a decided NO to the blandishments of these same corporations to continue giving them free reign and unbridaled monetary policy powers which has led to the present US economic melt-down putting so many american workers and farmers thru a nightmare of hardship. People like Paul Beingessner are at the heart of what has made our country great.

Little Muddy

Canadian Wheat Board Elections

2008-11-15T01:37:00.000-06:00

Hi folks,

A while back I sent you a letter asking if you wished to donate to my
CWB director election coffers. Many thanks to those of you who did so.
It is only possible to run an effective campaign because of your
support.

The election is being fought very hard on all sides. I suspect the
result will turn on a few hundred votes. For those of you in District
8, your support in getting out the vote is greatly appreciated. If you
have friends or neighbours whom you think might not return their
ballots, please give them a call and urge them to do so.

If you still wish to contribute, or had planned on it but just didn't
get around to it, there's still time! We plan to keep campaigning hard
until the end of the time period (Nov 28) as ballots continue to be
returned right to the end.

Cheques can be made out to Paul Beingessner CWB election, and sent to
Paul Beingessner, Box 74, Truax, Sk. S0H 4A0

Sincerely,
Paul

Labels: Paul beingessner

If They Love The Open Market

2008-11-15T01:16:00.003-06:00

Column # 694 10/11/08

My neighbour Pete is a cattleman to the core. Like his father and
grandfather before him, he knows cows like the back of his hand. But
his usual smile fades a bit these days when the discussion turns to
the cattle industry. Whose doesn't? Calf prices are as bad as they've
been since the beginning of the BSE crisis, and industry analysts
claim there is no good news in sight.

If Pete were into hogs, he would likely be even grimmer, especially if
he were unfortunate enough to be a weanling producer in Manitoba. A
few months ago weanling producers were talking of having to euthanize
piglets for which there was no market. And that was before Country of
Origin Labeling was implemented in the U.S. Now that hog packers in
the U.S. know the details of COOL, they aren't much interested in
Canadian born or raised pigs. This will only get worse as the April 1
date for full implementation of the rules approaches.

You have to give it to American farmers. They worked for many years to
persuade their lawmakers and citizens that COOL was indeed a cool
idea. Industry watchers in Canada spent those years alternating
between "it'll never happen" and "watch out for this one". Don't
expect COOL to disappear any time soon either. American politics is
likely to become more protectionist in the future, not less.

Opponents of the Canadian Wheat Board's single desk have seen the
domestic American market as their fairy-tale ending for years. Higher
American prices, derived from feeding that large population, have been
the lure that has convinced some that they would be better off if they
could go it alone and beat their neighbours to that lucrative, but
limited, market. Pete has some advice for these farmers, based on his
lifetime in the cattle industry. "If these guys are so fond of the
open market, they should get into the cattle business."

His pithy statement, repeated twice for emphasis, captured a real
insight. Without access to American grain markets, the idea of an open
market for wheat and barley loses an awful lot of luster. And anyone
who thinks that access isn't tenuous hasn't been watching for the past
two decades. American grain markets have remained available to the
CWB, in fits and starts, but only because of continual legal battles
fought by the CWB.

American farmers are acutely aware that prices often swing based on
very small changes in supply. Before BSE, Canadian beef was a very
small part of the American market, yet the border closure caused
cattle prices in the U.S. to soar to record heights.

While the amount of grain we send to the U.S. is small compared to
American production, its absence would no doubt cause their prices to
rise, as millers would have to scramble to find the high quality wheat
that is in short supply there. Most CWB wheat and durum moving to the
U.S. now goes down in rail cars, directly to mills. An open market
would see an influx of grain trying to move by truck into American
elevators when prices were high. Of course, that is also when American
farmers are trying to deliver into a constrained system. The visual
effect on American farmers would be powerful.

It took a long concerted effort to limit Canadian hogs and cattle
exports to the U.S., but for their farmers the taste of victory is
sweet. You can expect our herds to contract to a far greater extent
that theirs because of it.

You can also expect American grain farmers to continue to push in
every way possible to keep Canadian grain out. Up until now, farmers'
greatest defense has been the money they've spent through the CWB's
court challenges. Changes to the CWB's mandate would end such efforts.
The transnational grain companies that will control the Canadian grain
trade in that event have little interest in keeping the American
market open, since they get their pound of flesh no matter where our
grain ends up.

Pete knows that. That's why he says we need the CWB.

© Paul Beingessner beingessner@sasktel.net

Lies Someone Told Me

2008-11-04T02:20:00.003-06:00

Column # 693 03/11/08

Of all the lies told about the future of the CWB if it loses its
monopoly, one of the biggest is the idea that producer cars and short
line railways will somehow survive this sea change. They won't. At
least not the ones in Saskatchewan, which is home to all the short
lines that exist on grain dependent branch lines. There are, in fact,
seven of these. They are the Great Western Rail, Southern Rails
Cooperative, Red Coat Road and Rail, Fife Lake Railway, Wheatland
Railway, Thunder Rail, and Torch River Rail.

Other short lines on grain dependent branch lines operated for a time
in Manitoba and Alberta, but eventually failed. The striking
difference was the fact that the railways that failed in
Saskatchewan's sister provinces were owned by private investors. The
seven short lines in Saskatchewan are all community owned. And, while
they do move other traffic, all are heavily dependent on producer cars
for the majority of their traffic.

The short lines in Saskatchewan started life as attempts to retain
grain handling options for farmers. They were seen as means to an end.
Maintaining the railway would not only allow farmers the option of
loading producer cars, it would also allow for the possibility of
other economic development initiatives in the community. Alberta's and
Manitoba's grain dependent short lines were started and owned by
private investors wanting to make a buck. Without a substantial grain
elevator presence, which the short lines do not have, there is no buck
to be made owning a grain dependent short line.

There may be, however, survival, if the short line attracts enough
producer cars and other traffic to pay the bills and maintain the
track. While it has been a tough business, the older short lines,
Southern Rails, Red Coat and Great Western, have been able to do just
that. They have also succeeded to some extent in the economic
development game. Red Coat garnered a rail car repair facility,
Southern Rails gained a pulse processor, and Great Western operates
its neighbouring short lines - Red Coat and Fife Lake. The latter has
a kaolin mine.

But producer cars remain critical to their survival, and survival is a
year-to-year thing. Producer cars themselves depend entirely on the
CWB. Ten or twelve thousand producer cars of CWB grains move each
year, mostly from short lines. Though farmers grow millions of tonnes
of canola, peas, flax and lentils in Saskatchewan, virtually none of
these move in producer cars. Nor will they, since the grain companies
that control these crops don't want to lose the lucrative handling
charges they make by moving them through their country elevators.

With the CWB, producer cars work for two reasons. One is price
pooling. Price pooling works because the CWB has a monopoly over
export sales of wheat and barley. Its overwhelming position in the
market means it makes sales year round, into all available markets.
This allows farmers to have confidence in a pooled price. Without the
single desk, the CWB's dominance disappears, as it has to rely on its
competitors to handle grain for it both inland and at port. Its sales
would be limited and price pooling would be a scary prospect for
farmers who wouldn't know how large or small the pool might turn out
to be.

The second reason producer cars work now is the CWB's ability to take
part in the railways' car ordering systems. Small blocks of cars have
a low priority for the railways, but the CWB's size gives it
flexibility to allocate cars to producers. Without the CWB, a farmer
wanting to load his own car could still get one, if he could find a
terminal that would take his grain and allow him the advantage
producer cars currently allow (not something they do now). But he
would get that car at the railway's leisure. This is not a happy
prospect for someone selling into a spot market that needs timely
delivery.

Without a dominant CWB, producer cars might exist in theory. Their
practical use would be almost non-existent. And without virtually all
the producer cars they now obtain, short lines would rapidly fail.
Their debts and high track maintenance costs would ensure this. And
with them would go other community investments on their tracks and any
future economic prospects that depend on rail. That, sadly, is an
economic certainty.

© Paul Beingessner beingessner@sasktel.net

Greenspan was "Partially Wrong"

2008-10-31T20:26:00.002-05:00

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

2008-10-31T01:32:00.003-05:00

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

2008-10-20T14:35:00.002-05:00

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

2008-10-13T22:51:00.002-05:00

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

2008-10-07T22:15:00.002-05:00

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

Election Especially Important to Farmers

2008-09-30T00:38:00.002-05:00

Column # 688 29/09/08

The federal election poses some interesting dilemmas for westerners
and farmers in particular. Farmers have little reason to be happy with
the Harper government. The livestock industry has been largely
ignored, despite its wretched state. The Conservative's vaunted new
generation of business risk management programs have turned out to be
warmed over versions of the ones that garnered the Liberals so much
disdain. Changes to the Canadian Grain Commission, though not all
completed in the last parliament, were proposed with little
consultation with farm groups and less support. Even the grain
companies were against the changes enacted to KVD.

Grain transportation continues to be a problem. A long, drawn-out
review is underway but there is no certainty that the structure of
this will bring positive results. Early in their minority government,
the Conservatives gave the hopper cars to the railways and thumbed
their noses at the Farmer Rail Car Coalition. In fact, the government
has thumbed its nose at most major farm organizations, including KAP,
APAS, WRAP and SARM. It prefers to talk to the like-minded.

Farmers who support the CWB have even less reason to like Harper and
his pair of Agriculture Ministers. From unwarranted firings to gagging
to disdainful treatment, the Harper government has thrown it all at
the CWB.

The dilemma for farmers is that they may not have fully recovered from
their anger at decades of being ignored by the Liberals to want to
give them another chance. When last in power, the Liberals didn't show
much interest in agriculture. Nevertheless, there are some Liberal
candidates with excellent credentials in this area. If the Liberals
were to form government, it would be great to have the likes of Bob
Friesen in Manitoba and Rod Flaman and Duane Filson in Saskatchewan in
that parliament. Maverick Liberal David Orchard should be elected just
for the color he would provide in parliament.

Farmers have mostly written off the NDP in federal elections, but
Nettie Wiebe, former president of the National Farmers Union stands a
reasonable chance of taking Saskatoon-Rosetown-Biggar from the
Conservatives. Wiebe is a veteran of farm politics, and smart as a
whip.

If all the federal parties can be accused of paying too little
attention to agriculture, farmers might be tempted to shrug their
shoulders and vote Conservative out of habit. The consequences of that
may contain some elements farmers haven't thought through.

A majority Conservative government will beyond a doubt move quickly to
eliminate the CWB in all but name. The single desk will be removed,
along with government guarantees. What would remain would be a small
grain broker with a decimated sales force, relying on its competitors
to source and handle grain. Price pooling will also end, as no pool
has survived long without a single desk mandate to back it. Without
price pooling and without the clout of a strong CWB to ensure rail
cars, the use of producer cars will also end. Those who doubt this
could give Pollyanna a run for her money.

Even a minority Conservative government will generate the same
results. The Conservatives came across the strategy of making all
motions confidence motions in the last parliament. Opposition parties
will not risk triggering an election by defeating a motion with
limited relevance in the rest of Canada.

When it comes down to it, farmers who load producer cars or live near
short line railways stand to lose the most. Almost all short lines in
Saskatchewan depend on producer cars for the bulk of their business.
Without the CWB to facilitate these, the small railways and the
communities that benefit from them will have a short future.

If any farmers are happy with the Harper government, it would be the
handful that belongs to the Western Canadian Wheat Growers and the
Western Barley Growers. In addition to harassing the hated CWB, the
government that decried handouts to special interest groups turned
over a cool half-million dollars to the Barley Growers in 2007 to
"facilitate the development of new private sector risk management
solutions". That would come to about 10,000 bucks per Barley Grower. Is
it possible some of this money will end up in CWB candidates' coffers?

By contrast, the Wheat Growers much have felt monumentally slighted.
For them, Harper only managed to cough up a measly $110,000 to
"facilitate the development of new private sector risk management
solutions". A problem like that apparently requires the combined
brains of both groups.

Farmers have some important choices to make in the election. If they
do so without careful consideration of the consequences, they will
have a long time to regret it.

© Paul Beingessner beingessner@sasktel.net

Civil Servants Are Not the Minister's Flunkies

2008-09-22T18:25:00.001-05:00

Column # 687 22/09/08

One of the problems with writing a weekly newspaper column is timing.
If a story occurs just after you've sent in a column, your version,
should you choose to write it, won't appear until about ten days
later. Not so timely in some cases.

So I write about Gerry Ritz's controversial comments about listeriosis
with some trepidation. By the time you read this, Gerry and his
comedic performance will have faded from the news, replaced by the
ongoing stream of promises from the political parties. But this one is
too important to let go just yet. Like editorial writers across
Canada, I want to have my say.

By now everyone has heard the story. Gerry Ritz, failed ostrich farmer
and Agriculture Minister joked that the listeriosis crisis originating
at Maple Leaf Foods was "death by a thousand cold cuts". He further
bleated that he hoped a reported case in PEI was Liberal ag critic
Wayne Easter. Ritz made the remarks on a conference call with an
assortment of ministerial office people and bureaucrats from the
Canadian Food Inspection Agency and other departments.

The content of the call was leaked to the media by an anonymous
participant, drawing a veiled threat from Stephen Harper. Woe to the
fellow if found.

Calls for Ritz to resign or be terminated both as Ag Minister and as
candidate were swift. Most centered on his insensitivity at a time
when people were dying (eighteen to date) from the bacteria, including
ultimately an elderly woman in Ritz's constituency. Ritz issued the
obligatory apology, while Steven Harper focused on the embarrassment
to Ritz, whom he described as the best Ag Minister ever. Secretly,
Harper must have been wishing he had put the gag order on Ritz, rather
than on the CWB.

Unlike those calling for Gerry Ritz to resign due to insensitivity, I
don't think this is reason enough to get rid of the Minister. After
all, Harper can't remove every insensitive clod in his government. The
ranks would be too thin. I suspect Ritz was only practicing for a
second career as stand-up comic after his political life is over. I
mean, there's no future in ostriches to return to.

Don't get me wrong though. I do think Ritz should be removed from the
Ag Minister post. He should be removed for incompetence. He apparently
has no idea how government works, nor of the seriousness of his job.

Ritz's lack of understanding of government stems from his belief that
the government of the day can do whatever it pleases. That Stephen
Harper has this attitude is undeniable. Key civil servants, like the
Chief Electoral Office or the head of the Canadian Nuclear Safety
Commission or the CEO of the CWB are terminated because they won't do
what the government wants. Ritz blustered and fumed because the CWB
directors and management wouldn't follow his commands. He ordered, as
one example, that he be given the names of organic farmers who
participated in a CWB program. When told that was contrary to privacy
laws, and would not be done, he demanded the list twice more.

The Conservative government seems to believe the job of civil servants
is to carry out the political agenda of the Conservative party. It is
decidedly not. The job of civil servants, like those at the CFIA, is
to follow the laws and regulations that are laid out in statute for
the department. Ritz's ministerial officials, his political hacks, are
there to do his personal bidding, however ludicrous. But there is a
major distinction between his office staff and the Agriculture
department. Civil servants are there to do their jobs, not to protect
the Minister's behind or carry out his political whims. God help us if
a government had no civil service to buffer the idiocies of members
without a grain of common sense.

Not understanding this, Ritz thought he was among friends in his
conference call. When he should have been receiving a briefing on the
state of the listeriosis outbreak, he was obsessed with worry about
the political fallout. The "death by a thousand cold cuts" remark
referred to the damage to the government, which had cut inspection at
meat plants. This was the focus for Ritz, who should have been
concerned with dying Canadians and how to deal with and prevent such
outbreaks.

His failure to understand this, to realize the life-and-death
seriousness of his job is why Gerry Ritz is not fit to be Minister of
Agriculture.

© Paul Beingessner beingessner@sasktel.net

Conservatives Change Regulations, Avoid Parliamentary Scrutiny

2008-09-15T13:28:00.004-05:00

Column # 686 15/09/08

Most of us don't pay a lot of attention to laws. I don't mean we don't
obey laws, or that we don't know what they are. We generally have some
idea of the laws that are obvious - like prohibitions against murder,
or parking without plugging the meter. We may be less aware of other
laws. How was I to know that U-turn on Albert Street was illegal?

Laws don't just involve things that we should or shouldn't do. Laws,
or legislation, concern just about every aspect of government's
involvement in our lives. Legislation, for example, defines the
responsibilities of organizations like the PFRA. Legislation
determines the functioning of the Canadian Wheat Board. Legislation
spells out the way elections are run - like legislation setting fixed
election dates.

Now, the part most people may not be aware of is the regulations that
accompany legislation. In many cases, legislation spells out the broad
framework for something. Regulations are then written that fill in the
specifics. For example, in Saskatchewan we have had a railway act that
governs the operations of short line railways since 1989. It
determines, for example, that railways must operate in a safe manner.
The specifics of safety, track maintenance, etc. would normally be
spelled out in regulations. The Saskatchewan government, however, has
never gotten around to writing regulations for the railway act.

The interesting part about regulations is that, unlike the acts they
pertain to, regulations are not vetted by parliament or the
legislature. Changes to regulations can be made by Order-In-Council.
This means that the Cabinet of the government of the day can change
regulations simply by announcing that it is are going to do so, and
publishing that announcement in the Canada Gazette.

This is good news for minority governments. Minority governments can
have problems getting legislation passed. Stephen Harper's
Conservatives ran up against this problem in trying to emasculate the
Canadian Wheat Board. It had legislation to end the single desk of the
CWB, but never tried to pass it, knowing it would not get through
Parliament. Instead, the government tried to do the same by changing
the regulations concerning barley marketing through the CWB. Sadly for
the Conservatives, the federal court declared that this had to be done
through legislation, not through changes to regulations, since it
violated the spirit and intent of the CWB Act.

The Conservatives have used regulation changes, though, in their
ongoing vendetta against the CWB. Recently, Agriculture Minister Gerry
Ritz changed the regulations to the CWB Act to allow any third party
to spend unlimited amounts of money to influence director elections.
Regulation changes are nifty for governments like the Conservatives.
Rather than have to debate the proposed changes in Parliament, they
can simply make them, and ignore all questions about why the heck you
would do this in the first place.

Ritz made another recent change by regulation. This was to the
regulations governing Farm Credit Canada. In considering applications
for FCC loans, lending officers will now be required to assess the
"personal integrity" of the client. The regulation change drew
immediate fire from the Canadian Federation of Agriculture. Rather
than explain the reason for this odd move, Ritz's office said no
explanation would be forthcoming. It appears the move could be used by
the government to get back at political enemies, or perhaps some
farmers it doesn't like.

Gerry Ritz has a habit of doing things like that. He requested
repeatedly, for example, the CWB's records of dealings with organic
farmers, despite being told the CWB could not legally supply those.
Woe to any foes of the government who request FCC loans. Merely
opposing the Conservative agenda could cast doubt on your personal
integrity.

In addition to changing regulations, the Conservatives had another
successful way to overcome their minority status in the last
Parliament. They simply made every vote they wanted to win a
confidence measure, thus calling the bluff of a Liberal party not
ready to enter an election. Make no mistake about it, if the
Conservatives are elected with another minority, they will use this
mechanism again. And I am willing to bet that one of the first pieces
of legislation they will use it for will be the changes to the CWB Act
that would end the Board's status as single desk seller of wheat and
barley. In this, and in any other matters, a shrewd and conniving
government will find a way to overcome minority status.

© Paul Beingessner beingessner@sasktel.net

Two Elections Bring CWB Issue Into Focus

2008-09-15T13:23:00.003-05:00

Column # 685 08/09/08

Farmers in western Canada are currently confronted with not one, but
two elections that could seriously affect their grain marketing
practices and options. The call had scarcely gone out for candidates
to come forward for the Canadian Wheat Board director elections when
Prime Minister Stephen Harper announced he would be ignoring his own
legislation calling for fixed election dates and calling a federal
election.

The importance of the election for CWB directors is obvious. Since the
government appoints five of the fifteen CWB directors, and these are
now all opposed to the single desk for wheat and barley, the ten
farmer-elected directors remain the bulwark against Harper's intent to
dismember the board. Two of these ten are now opposed to the single
desk. A shift that produced one more would likely lead to major
changes in the mandate of the CWB.

Likewise, the federal government had as one of the main planks in its
agriculture platform in the last election that it would end single
desk selling. It has been unable to do so only because it lack a
majority in Parliament. Should that change, the end of the CWB's
single desk would be swift and complete.

Those who oppose the single desk argue that farmers have been
successfully marketing their other crops for decades, and could do the
same for wheat and barley under the CWB jurisdiction. There is no
doubt they could sell their own wheat and barley. And they could
likely do it as successfully as American farmers who last crop year
averaged about $6 per bushel of wheat while the CWB's pooled price was
several dollars better. Still, there is an argument to be made here.
Some would be more successful than others.

There is one area, however, where farmers could not replace the CWB,
even inadequately. This is in the CWB's connection to producer cars.
Without the single desk, the number of producer cars would shrink to
insignificance.

Now, I know this is hard for some people to accept. Even the president
of one of Saskatchewan's largest short line railways can't wrap his
head around it. When I suggested that the demise of the CWB would
deprive his railway of most of its traffic, his response was that
farmers would find a way. Small comfort, that.

I recently heard a neighbour of mine, a stalwart user of producer cars
say the same thing. He had been told by the grain terminal that
handles his grain that it would still be looking for producer cars if
the federal government succeeded in ridding the world of the error of
single desk selling.

This is a fine belief if one thrives on fairy tales and rural legends,
but believing it in the real world just means you don't understand how
grain marketing and transportation work. Producer cars work for two
simple reasons. One is price pooling. The other is the CWB's ability
to secure cars for its movements.

Price pooling would end with the end of the single desk. No one has
ever run a successful price pool outside the single desk, though it
has been tried. Producer car shippers are most able to get cars at two
times: early in the crop year and in June and July. The majority of
elevator grain is gone by late in the year and the railways will more
readily allocate cars for smaller movements at this time. Without the
price pool, farmers will try to price their grain either when they
badly need cash, or into price peaks. This would mean getting producer
cars precisely when they are needed. Any producer car shipper can tell
you this won't happen.

The other issue will be car supply. The CWB has huge clout with the
railways because it ships such a vast amount of grain, but it still
bargains for cars like the grain companies. Part of the allocation it
secures goes to producer cars. Without the CWB, grain companies would
always allocate cars to their large elevators to capture incentive
rates when cars were in short supply. Cars would be in short supply
when prices were high because that is when everyone wants movement.
Producer car shippers would not get cars and would miss these price
peaks. The producer car would soon look very unattractive.

If you still need further convincing, look at producer car movements
for canola, our other large acreage crop. Despite complaints for years
about an unreasonably high basis, canola does not move in producer
cars. Yes, the grain company would take your car of canola, but the
basis would be the same as if you shipped through the elevator. It's
been tried.

Most short line railways in Saskatchewan would fail without producer
cars, so the federal and CWB elections are even more significant in
these areas.

By the way, farmers should soon receive a confirmation that they are
eligible to vote in the CWB election. If you don't get this when your
neighbours do, you should call the election co-ordinator.

© Paul Beingessner beingessner@sasktel.net

Agriculture Policy Increases Food Insecurity

2008-09-15T13:15:00.002-05:00

Column # 684 01/09/08

When I was a kid, the flavor of the day in schoolyard humour was Polish jokes. Though I didn't understand it at the time, these nasty little bits of racism arose from the wave of Polish immigration into Canada that occurred following WWII. Established societies tend to look unfavorably on recent immigrants and target them as scapegoats for society's ills – hence the Polish jokes. No doubt these were prevalent on the prairies because that is where 60 percent of Poles ended up.

Since that time, the idea has always lurked in the back of my head that Poland is something of a backward and pathetic nation. The Poles were slaughtered by Russians and Germans in the big wars, and Poland became a Russian satellite until Lech Walesa and the Solidarity movement rose up. Apparently the Polish government and the European Community also think Poland is backwards, at least the agriculture sector. Poland is undergoing a "modernization" of agriculture, courtesy of its agriculture policies and the EU's wad of cash.

Polish farms are presently small by North American and European standards, at 25 to 50 acres. The EU and Poland's government believe increasing production and hence exports depends on farms being large enough to employ modern technologies. As a result, the EU is offering huge subsidies to farms that expand to larger than 450 acres. Land, machinery and building purchases can receive from 50 to 75 percent subsidy. The results are predictable, and what has happened in Canada over many decades in terms of farm consolidation and migration to the cities will happen in Poland in short order.

International agencies tend to see this as a good thing. Quasi-governmental organizations like the World Bank and International Monetary Fund have worked hand in hand with governments in developed countries to change the agriculture policy of nations around the world. For many countries, the result has been increased exports and less food production for local consumption. Honduras is a good example.

In return for loans from the World Bank in the 1990s, Honduras was required to cut tariffs that protected its domestic rice producers. The government was told to abandon grain reserves that were used to stabilize prices. Production of other goods for export was encouraged and reduction of tariffs allowed cheap American rice to displace local rice in Honduras. Once self-sufficient, Honduras now imports a staggering 83 percent of rice consumed. This was a disaster for rice farmers, but in the short run, reduced local prices for consumers. Unfortunately for the many poor in this impoverished country, the recent boom in commodity prices drove up the price of rice to the point where people could no longer afford it. Hunger and malnutrition rose dramatically.

The same scenario has been repeated in many poor countries. To make things worse, some rice producing countries, like Vietnam, China and Cambodia, have stopped exports of rice to stabilize prices at home. Thus, other poor nations that need to import can scarcely find supplies, even at exorbitant prices.

High prices for farm commodities are a boon to Canadian farmers, and not much of a problem for consumers with money to spare. They could be a benefit to farmers in poor countries who have a bit of surplus to sell. But for countries that have lost food self-sufficiency, price increases and especially price instability only benefit the wealthy few, particularly the grain traders, while bringing disaster for the many. The UN estimates these factors have recently added 100 million to the ranks of the hungry. Much of the instability has been caused by speculators playing commodity markets. Speculative money in commodities futures has ballooned from US$5 billion in 2000 to US$175 billion to 2007.

Some countries are rethinking agriculture policy in light of the problems caused by recent price instability. Though we think about exports a lot in Canada, the fact is most food consumed in the world is still produced by small farmers. Policies that reduce the number of small farmers reduce food security. This is coming home with a vengeance in many African, Asian and Central American countries.

The issue is not really the high cost of basic foodstuffs. Small farmers tend to produce for their families and their villages first, with surpluses for sale to the larger community after this. Large farmers focus on the best-priced market. If that is for carnations for export, local food production suffers. As farmers leave and are driven from the land in the millions all over the world, they are added to the ranks for the food-insecure.

The cost of imported food will only continue to increase as transportation costs rise with oil price increases. Poor countries that have lost self-sufficiency and rely on imports will see increasing costs for food. Poland's agriculture policies might lead to greater exports, but what will the ultimate cost be?

 Paul Beingessner beingessner@sasktel.net

Wind Turbines Come Under Fire

2008-09-15T13:12:00.001-05:00

Column # 683 25/08/08

The debate over alternative liquid fuels like ethanol is fairly easy to understand. After all, it takes large amounts of fossil fuels to produce the corn or other crop needed to produce the ethanol. Is their really any net benefit from the process, or are biofuels just a sneaky way to get taxpayers to subsidize farmers?

The debate over wind turbines is a little tougher to comprehend. You can't challenge the energy balance of the electricity-producing towers, which have become popular with governments around the globe. You would think environmentalists would be similarly enthralled with the idea of replacing coal or nuclear powered electrical plants with emission-free wind power. Some European countries have done so wholeheartedly, with Germany leading the way. Germany plans to phase out its nuclear power and replace it with renewables. Wind is a major factor in this decision. Germans are not only generating lots of electricity with wind power. They are generating significant numbers of jobs by being one of the largest producers and exporters of turbines.

Some environmentalists, however, are not so happy about wind turbines. A recent editorial on wind power called them an assault on human well being, a threatening monster jammed down the throats of neighbors and localities. The idea seems to be that wind turbines offend the senses by their presence on the skyline, and thereby degrade the human spirit.

The idea is also expressed frequently in environmental circles that the use of renewable energy sources has failed to curb growth in oil and gas consumption. Rather, it has simply been part of a large overall increase in energy consumption globally – an increase that is having serious environmental impacts.

The environmental movement is split on the approach to wind power and other renewables. Some groups endorse these strongly, while a few smaller ones are vocal in their opposition for the reasons given above.

The simple fact is that we are a society hooked on high energy consumption, and our consumption is rising yearly, both for personal and industrial use. The latter is huge in Canada, as vast amounts of energy are consumed in the production of tar sands oil.

Farmers generally view the advent of a wind turbine not as some looming monster, but as a welcome addition to the income their land might generate and for the jobs created, albeit few, in the maintenance of the turbines. On a personal level, I polled my rather environmentally conscious family about their feelings toward wind towers. It was quite positive. We tend to see them not as a blight on the horizon, but as an elegant and graceful way to generate electricity.

I am not really clear on the link anti-turbine groups make between the over consumption of energy by our society and the production of energy. It seems to be the belief that the more we produce the more we will consume. Since few of us have any awareness of the amount produced, that seems unlikely. Consumption of power, like consumption of alcohol and tobacco, is directly linked to our ability to pay. Those with more money have bigger houses, drive bigger cars, have more energy consuming toys, take more airplane flights, buy more consumables and so on.

Wind power is expensive – at least in Saskatchewan it is more expensive than throwing another shovel of coal in the power plant. In this regard, using wind power should actually reduce energy consumption since it will make the price of electricity higher.

It is unfortunate that we apparently can't see the real looming monster on the horizon. This is the vast increase in the cost of petroleum products that will take place over the next several decades as demand increases in heavily populated countries like India and China, and as conventional (cheap) supplies of oil decline. As this happens, economics will force some hard choices on us. Energy use will consume a much greater percentage of our personal incomes, leaving lower income people with some hard choices. Even the wealthy will have less money to throw around.

Higher energy costs will hit rural people harder than urbanites. With no access to public transit, and having to travel further for all services, rural folk will spend a greater proportion of their income on energy. At some point, we will have to get really serious about reducing energy use. This will not be as hard as people seem to think. We used far less energy forty years ago, yet our lifestyles were quite similar. We were also healthier and some might even say happier.

But we will still need energy. Those looming monsters on the horizon, the wind turbines, will be part of that mix - a relatively clean, safe part. Get used to it. We should use the interval to make them as safe and efficient as possible.

 Paul Beingessner beingessner@sasktel.net

Transportation Review Will Be Light on Farmer Input

2008-09-15T12:44:00.003-05:00

Column # 682 18/08/08

Farmers on the prairies are beginning a harvest that looks to be above average in many districts. Busy as this season is, they likely have little time to think ahead to the fall, winter and spring when they will attempt to ship that crop to buyers domestically and around the world. But maybe they should, because an above-average crop could bring back the transportation woes that plagued grain shippers and hence farmers in years past.

To anyone who has farmed more than a few years, the story will be familiar. Grain movement starts slowly in Sept and October and gets worse in December and January. Shippers point fingers at the railways, the railways point at the weatherman and farmers point their middle fingers skyward in frustration. Demurrage bills pile up; sales are lost. Seeing a chance for political gain, the Wheat Growers swear it is the CWB's fault.

Around April, farmers start thinking about seeding, and transportation problems fade into the background. A year goes by, and the transportation monitor issues a report saying that the system really hasn't gotten any better than it was when we had umpteen branch lines and small grain elevators. Governments cluck sympathetically and the railways release profit figures that show yet another record has been broken. Their CEOs get hefty pay increases.

As I said in an earlier column, it would be hard to find any grain shippers today who would tell you they are happy with the service the railways provide. Shippers of lots of other products would sing a similar song. That's the reason shippers across Canada have been asking the government for major changes to the transportation act for nearly a decade. What they've received from past and current governments has been tinkering that has done little to improve the situation. When the last transportation act amendments became law, shippers got one small bone from the Conservative government. It promised to conduct a review of railway service.

That review is about to begin – the details have been released. Shippers who hoped it would be a chance to thoroughly air their grievances should take a hard look at them. This review looks nothing like the several that have preceded it.

The structure of the review will go something like this: consultants will be hired to gather statistical data on railway performance, to look at the logistics system overall and to examine railway best practices. This phase is expected to take about six months. Following this, the government will appoint a panel of three "eminent" persons to examine the collected data and draw some conclusions and recommendations. Then, and only then will "interested parties" be invited to comment on these recommendations and give their own input.

It seems a cock-eyed way to conduct a review, unless your goal is to manage the outcome. The data-gathering phase will largely be carried out under the radar with little chance to scrutinize the process or the input. Logically, you'd expect that you would collect public input before writing recommendations. If these are written before small shippers and farmers get to tell their stories, they will frame the discussion that comes after. The recommendations will decide which issues are important and which solutions are possible.

The second problem I have with the structure is the idea of appointing a three-party panel to write recommendations. The government announcement says that "ideally" it would have someone with a railway background, someone with a shipper background and a "neutral" third party. Tri-partite panels, especially where worldviews might conflict substantially, tend to produce timid and tepid solutions. Better to have a single independent person writing a report. Solutions will be more imaginative and less subject to pallid compromise.

We have already tried enough half-measures to correct the power imbalance between the two large railways and Canadian shippers. They haven't worked. They weren't really designed to work because Transport Canada's bureaucracy has had a decades-long love affair with the railways. The government's design of this inquiry holds only faint promise for real reform.

 Paul Beingessner beingessner@sasktel.net

Apology for interupted posting

2008-09-15T12:27:00.002-05:00

My apologies for the delay in posting Paul Beingesner's column. Due to a computer glitch.

Little Muddy

Harper Wants Third Parties to Influence CWB Election

2008-08-15T12:32:00.002-05:00

Column # 681 11/08/08

No matter where you stand on the Canadian Wheat Board, you have to
admit that what happens to it is farmers' business. Not the business
of the butcher in Burnaby or the real estate salesperson in Regina.
Not the business of the dog groomer in Davis Inlet, the welder in
Wetaskawin or the taxi driver in Toronto. And, though there is
something of a closer connection here, not the business of the grain
company in greater Winnipeg. While the grain company might be affected
by the way farmers choose to market their grain, it is still their
choice, and if they choose the single desk of the CWB, that is no more
the grain companies' business than it is that of the far northern dog
groomer.

I think most Canadians would see this as logical. Unless of course
they happen to be members of Stephen Harper's Conservative government,
or that tiny number of farmers who show up in every survey as stoutly
believing that the federal government should be the one to decide the
future of the Canadian Wheat Board.

While those farmers could be written off as self-doubters, since they
don't even trust themselves to the task of governing the CWB, Harper's
gang lacks any such logical explanation. His party, it seems, believes
that everyone but farmers should decide the fate of the CWB. How else
to interpret the latest in a long series of attempts to thwart the
will of the majority of farmers?

Harper recently declared that anyone wanting to exert their influence
over the future of the CWB should be able to. Anyone, that is, except
farmers. To that end, the Conservatives have issued a Cabinet order
allowing outside parties the opportunity to spend unlimited amounts of
money to influence CWB director elections. Farmers who are CWB
candidates, on the other hand, will be restricted to raising just
$15,000 to put their own views forward. In doing so, he has declared
that this would "promote eligible voters to become fully informed
about the future direction of the CWB during the election of its
directors". It is a move that would be akin to allowing corporations
in other countries to spend money to influence Canadian elections.

Stephen Harper's record on campaign spending by third parties would
indicate he thinks democracy is for those with money. In 2000, Harper
vigorously opposed Jean Chretien's bill, which limited third-party
spending in federal elections. He launched a constitutional challenge
to the bill while head of the National Citizens' Coalition. Oddly
enough, when the Supreme Court of Canada threw out Harper's challenge
to federal election spending limits it used language similar to
Harper's on the CWB, but reached the opposite conclusion. It declared
that spending restrictions on third parties would provide "a level
playing field for those who wish to engage in the electoral discourse,
enabling voters to be better informed".

Let's face it. Most folks who run for the CWB spend a pittance on
their efforts. Publicly available information shows that many
candidates fund their campaigns largely from their own pockets. In
federal elections, candidates are often relatively wealthy, witness
the number of lawyers who regularly try to get elected. Candidates for
election to the CWB board of directors are less likely to be
well-heeled. They are farmers, after all.

But there are parties other than farmers who stand to gain mightily
from the end of the CWB. Viterra, for example, the grain company
formed from the amalgamation of Agricore United and Saskatchewan Wheat
Pool, has publicly declared it would stand to make millions if it were
able to market farmers' grain in an unrestricted manner. Surely this
would be incentive enough for Viterra to pour money into supporting
candidates that would support its view.

Harper's government has initiated a number of illegal moves against
the CWB, including an attempt to take barley from the single desk and
another to gag the CWB. The courts threw out both of these. Harper's
proposal on third-party spending violates the principle of the federal
election law. Since he is changing regulations this time, not the bill
itself, his actions do not have to go through Parliament, so
technically they may be legal. However, as editorial commentators
across Canada have indicated, they make a mockery of democracy.

Interested parties have till the end of August to tell the government
what they think of this.

(c) Paul Beingessner

Deny, Deny, Deny

2008-07-29T16:03:00.002-05:00

Hi folks,
I won't be sending out a column next week as we are going on a short
vacation. Hope summer is treating all of you well. Regards, Paul

Column # 680 Deny, Deny, Deny 28/07/08

In Freudian psychology, denial is an ego defense mechanism. Defense
mechanisms are used by our subconscious minds to help us deal with
realities we find too difficult to face. They aren't a sign of mental
illness; rather, everyone uses them to some extent. They only become a
problem when their use leads a person to do things that are harmful in
the end. Freud had a whole list of defense mechanisms, ranging from
repression to projection to denial. The key thing to remember about
defense mechanisms is that they operate in the subconscious. We don't
realize we are indulging in them. So, denial is not really a form of
lying to ourselves. We actually believe what we are saying.

Now Freud is kind of old hat these days. Many psychologists today
figure he was too influenced by the repressed upper-middle class women
he saw in his therapy sessions, so they dismiss most of his theories
as unscientific. In the case of denial, however, current human
behaviour is making a pretty good case for Freud's idea.

Now, how does all this psychological mumbo-jumbo relate to
agriculture? Agriculture in developed countries, and increasingly in
all countries, is rooted in the consumption of fossil fuels. Fossil
fuels are the basis of planting, weeding and harvesting operations.
They produce our fertilizers and pesticides and transport our crops to
processors and markets. And they are running out.

Yes, you can trot out all the figures you want about oil sands, shale
oil, coalbed methane and the like. But a friend recently put it all in
perspective for me when he gave me the following figures: Currently
the world uses 87 million barrels of oil per day. This is increasing
rapidly and will reach 116 million barrels by 2030. At that time, we
will be using a trillion barrels every 23 years. In all of history up
until now, we've used a trillion barrels. By 2030, we'll be using this
much every 23 years. It doesn't take a rocket scientist to figure out
that our bingeing on fossil fuels will come to an end a lot sooner
than we think.

Whenever this argument is made, the usual response by those in the
throes of Freudian denial is to point to the reserves of oil sands in
Alberta and parts of Saskatchewan. Total reserves in the Athabasca
formation are estimated at around two trillion barrels, but only about
170 billion are recoverable with current techology. Even if the total
amount were recoverable, which it won't be, and notwithstanding the
massive amount of natural gas or some other form of energy required to
extract the oil from the oil sands, it is plain that we will indeed
run out of oil.

Of course, before that happens, the price will skyrocket and $1.40 a
litre diesel fuel will be a distant cherished memory.

The figures I gave you came from the International Energy Agency. The
IEA grew out of the Organization for Economic Co-operation and
Development (OECD) and is controlled by 27 developed countries
including Canada, the U.S., Japan and the U.K. The IEA's figures are
accepted by and available to these countries. So why do most of them
still act as if the petroleum age will go on forever?

The end of low cost oil will mean changes to our world as dramatic as
those brought on by the advent of low cost oil. We will continue to
need large amounts of energy, but we will have to get them somewhere
else. Some folks point to nuclear power as a solution to some of our
impending shortages. But, guess what! There are only 60 years of known
uranium reserves for the reactors currently operating in the world.

The simple fact, almost completely neglected by politicians and the
public in general, is that we need to cut energy consumption,
dramatically and rapidly. Doing so will stretch out existing petroleum
reserves and allow us more time to change the way we do just about
everything., including producing food.

And here is where denial really comes into its own. Reducing energy
consumption will mean fewer and smaller vehicles, less miles driven,
fewer airplane trips, fewer exotic vacations, fewer leaf blowers, less
food imported by air from Taiwan and Chile, smaller houses, and no
more electric toothbrushes. It will mean a whole lot more than that as
well. But these are precisely the things we don't seem prepared to
give up. In fact, we, 1.3 billion Chinese, and 1.1 billion Indians
seem to think these things are measures of the good life. Believing
this, we find all kinds of ways to tell ourselves that the impending
end of oil won't happen, or that there will be a technological
solution that will allow the orgy of energy use to continue.

I said earlier that the failure to acknowledge and act on these
realities is a form of denial by our politicians and ourselves. In
fact, that statement is denial in itself. The truth is that
politicians, at least those in real positions of power, know all this.
What they are about is protecting the interests of those reaping
massive profits from energy production in the current system.

Our denial, as citizens, is real though. In Freud's world, denial was
only pathological if it caused you to act in self-destructive ways.
Seems to me we passed that point some time ago.

(c) Paul Beingessner

Bureaucrats and Politicians Watch Rail Lines Vanish

2008-07-22T03:02:00.002-05:00

Column # 679
21/0708

The spring of 2008 brought good news to farmers in northeast
Saskatchewan in the form of a new short line railway, Torch River Rail.
While farmers in that part of the prairies were rejoicing at the
victory, following a long struggle, farmers in southern Manitoba were
gnashing their teeth as a last ditch effort to set up a short line on
portions of CP's La Riviere and Napinka subdivisions failed.

Saskatchewan's Torch River Rail, a farmer-owned short line, became the
seventh such railway in the province, which also is home to OmniTrax's
Carlton Trail Railway. Saskatchewan is unique among the prairie
provinces in that the seven locally owned short lines are found on grain
dependent branch lines which move little traffic other than grain and
are home mostly to producer car loading facilities and small elevators.
Nor is the province maxed out in this type of railway. To my knowledge,
there are at least four more farmer-based groups that are negotiating
with either CN or CP to set up new short lines.

In contrast, Manitoba and Alberta have no short lines owned by farmers
or community-based groups. Both have seen huge amounts of branch line
abandonment. In Alberta, few groups have even attempted to set up short
lines, though Alberta was home to the original short line, Central
Western Railway. The exception to this is a group of farmers on the
Alliance subdivision in Alberta, who have been jousting with CN, which
announced its intention to abandon the line several years ago.

The failure of the Boundary Trail Railway Company in southern Manitoba
illustrates why Manitoba and Alberta have been so unable to save branch
lines while Saskatchewan has a track record that is nothing short of
remarkable. Most of the blame for Manitoba and Alberta's failures can be
laid at the feet of their provincial governments. Most of Saskatchewan's
success stems from the same source.

The government of Saskatchewan was intimately involved in the quest to
save branch lines long before the first short line in the province began
operation in late 1989. Southern Rails Co-operative was the culmination
of a vision long held among civil servants in the Department of
Highways. While Southern Rails was the first farmer-owned short line, it
would be a decade before resistance from the major railways broke down
enough to see a second. During that time, however, Saskatchewan saw
limited branch line abandonment as the fight was on over each and every
line. The province had an active unit within the Department of Highways
and Transportation that worked pro-actively with farm groups around the
province each time the railways threatened abandonment. Besides offering
valuable technical support and advice, the province but up some cash,
offering interest-free loans to would-be shortlines to purchase track
and giving grants for feasibility studies.

The situation could not have been more different for farmers in Manitoba
and Alberta. The transportation departments there offered only
indifference or active hostility to the idea of short lines on grain
dependent branch lines. I remember a call I received about 15 years ago
from the major of High River, Alberta when the branch line through that
town was slated for abandonment. After explaining his options under the
law, I suggested he contact his provincial transportation department and
demand some support and assistance in exploring those options. His
gloomy response was that he had done that. Bureaucrats in that
department told him that, rather than supporting his efforts, they were
in agreement with the railways that branch lines should be abandoned.

Ironically, the trouble in Alberta and Manitoba can be laid partly at
the feet of the entrepreneurial spirit. Tom Payne, Alberta's iconic
railroader, was the impetus behind Central Western Railway. He firmly
believed that short lines should be profitable entities that survived by
acting as service providers to the big railways. In Manitoba, Brandon's
Cando Contracting built a small railway empire by becoming dominant in
the railway salvage business. Only later did Cando get into short lines.
The Peters' family enterprise was careful not to get involved in grain
dependent branch lines, preferring instead lines with a diversity of
traffic.

The government of Manitoba seemed more than happy to have Cando
scrutinizing its branch lines for viability. If Cando wasn't interested,
the government wasn't either. Manitoba's other abortive short line
venture came in the form of the Southern Manitoba Railway. These CN
branch lines were sold to an American company with a dubious reputation
as a railroad salvager. That short line lasted about eight years before
ceasing operation altogether.

Saskatchewan's farmer-owned short lines have developed with a different
mentality. The goal has seldom been to create highly profitable
railways. Rather, the short lines have been seen as a means to an end,
that end being the retention of viable rail service to maintain grain
delivery and community development options. Southern Rails Co-op has
logged eighteen years with this approach.

Such an attitude might have served Alberta and Manitoba well. Instead,
indifferent bureaucrats and myopic politicians have thinned their rail
networks to the point of no return. While it is largely too late now,
farmers in these provinces should have been kicking some government
derriere years ago.

And Saskatchewan? Recently the government came up with a half-million
dollars in grant money for short line rehab projects.

(c) Paul Beingessner
beingessner@sasktel.net

High Food Prices Not the Problem

2008-07-14T19:39:00.002-05:00

Column # 678 14/07/08

A recent Reuters news story on the high cost of food was itself food for
thought. The story concerned the U.S. Commodity Futures Trading
Commission (CFTC), an "independent" government agency with a mandate to
regulate commodity futures and option markets in the United States. The
CFTC announced it had formed a taskforce with other government agencies
to study recent activities in commodity markets. The concern that
prompted this was the meteoric rise in commodity prices over the last
year or so. Some suggest this has been fuelled by speculators looking
for a quick buck, rather than by any fundamentals of supply and demand.

The CFTC didn't single out food prices as the major area of concern,
citing instead rising oil prices and "other commodities". The Reuters
story, however, complained that high prices for farm commodities, along
with oil, have "roiled U.S. and world markets in recent months". It went
on to quote the U.S. Department of Agriculture, which it said is
"forecasting sharp increases this year in U.S. food prices, expected to
rise by five per cent in the largest increase since 1990".

The Reuters reporter, it seems, saw the focus of this story as the high
price of food. Indeed, this has become a major pre-occupation for
reporters and for lobby groups of all types. Food prices are too high if
you judge by the cacophony of voices shouting this mantra. Yet the
number Reuters used is startling for how low it is. Given the beating
farmers have taken since 1990, a five percent increase in their incomes
would be paltry. Yet a five percent increase in food prices can be
trumpeted as a major crisis. Note that Reuters did not mention the
percent increase in the price of gasoline or heating fuels or (here in
western Canada) house prices.

A story in a similar vein surfaced a couple weeks ago. It came from the
United Nations Food and Agriculture Organization. It seems the FAO had
commissioned but not released a study on the increase in grain prices
caused by the demand for grain for ethanol and bio-fuels. Contrary to
numbers put forth by the American government, which claims grain for
bio-fuels only contributed to three percent of the price increase, the
FAO study said it was actually 75 percent. This is an important issue,
but again, the focus of reporting on it often revolves around concern
about food prices.

Stories like this are commonplace today. The Canadian Chamber of
Commerce recently wrote a letter to the Prime Minister asking that
Canada give up its support for supply management in the interest of
getting a new trade deal at the WTO. The Chamber justified its stance by
claiming supply management cost the average Canadian family of four $300
more per year than it otherwise would have had to spend on dairy and
poultry products.

The common theme in these various stories is that food price increases
are universally a bad thing. This simply isn't so. Yes, they are bad for
those folks in poor countries existing on one or two dollars a day.
Since most of this meager amount is spent on food, any increase is
disastrous. For a relatively wealthy European, Asian or North American,
a few percentage points increase in the cost of food is a minor
inconvenience at most. Since a third to a half of all North American
meals are now eaten in restaurants, one less trip per week to the golden
arches would save enough to offset the "sharp" five percent increase the
USDA is fretting about.

The increasing cost of food is a good thing if the extra money accrues
to the world's farmers. That is a controversial item in itself, and not
really the subject for this column, but farmers are indeed achieving
somewhat better returns due to higher grain prices. This will spur extra
production, which is needed, since world grain stocks have fallen
precipitously in recent years. So that is a good thing on many fronts.

It doesn't change, however, the negative consequences for the world's
poor. But, and this is the crux of this long diatribe, we are defining
the problem incorrectly. The problem is not the high cost of food for
the poor, since many of the poor are small farmers, and might in fact
benefit when they go to sell any surplus crops. The problem is the low
levels of income and wrong-headed government policies that fail to
protect the vulnerable from food price increases. Much of this bad
government policy is entrenched in trade deals that attempt to force
open the markets of developing countries, under the guise of allowing
their farmers to compete on world markets. What they do is destroy the
ability of a country to enact policies to achieve food sovereignty.

All this underscores the fact that food policies have failed the two
classes that are most affected by the cost of food - farmers and the
poor. In a rational world, we would separate food out from other trade
and government policies, and examine it with a different lens. The CFTC
might be right to suspect that speculators are inappropriately affecting
the price of food, but it will come to the wrong conclusions in seeking
a solution if it thinks the problem is the high cost of food. The
problem is our failure to see the right to adequate food as the most
basic of human rights.

(c) Paul Beingessner
beingessner@sasktel.net

Proposed Sale Further Increases Packer Concentration

2008-07-07T17:03:00.001-05:00

Column # 677 07/07/08

Nilsson Bros. recent offer to buy the Lakeside Packers beef slaughter
plant in Brooks has pleased some folks in the cattle industry in
Alberta. Feedlot operators seem the happiest. They were worried that
Tyson Foods, the mega-corporation that owns Lakeside, would close the
plant in response to what Tyson has described as an excess of slaughter
capacity in North America. Had Lakeside closed, only one major packer
would have been left in western Canada - Cargill.

While there appears to be joy over the offer-to-purchase, it must be the
ultimate in making the best of a bad situation. Who but a farmer could
find happiness in a reduction in the number of buyers for his products?
Answer: feedlots owners, apparently.

Nilsson Bros., the purchaser-in-waiting is no stranger to cattle
producers on the prairies. In my part of southern Saskatchewan, they
made their presence felt a few years back when they purchased all of the
auction marts around here - Regina, Moose Jaw, Weyburn and Assiniboia.
Their first act on cornering the market on auction barns was to
introduce a new fee for feeding cattle held overnight for pre-sort
sales. Next was a reduction in the number of days when cattle were sold.
Most farmers around here weren't too happy about Nilsson Bros. monopoly
since it raised their costs and reduced their options.

Nilsson Bros. is also involved in cattle feeding and cow-calf
production. The Lakeside sale includes a 75,000 head feedlot owned by
Lakeside. Under the name XL Foods, Nilsson Bros. currently operates a
smaller slaughter plant in Moose Jaw and in several other Canadian and
American locations. It is now poised to become a major player in Canada.

While cattle feeders here are praising the proposed sale, cattle feeders
in the U.S. have long been concerned about the very situation evolving
here - packer concentration and captive supply, where packers own cattle
on feed. The trouble with this scenario is that owning cattle on feed
gives packers the ability to manipulate the market. When prices are
high, they draw on their own cattle for slaughter. This reduces demand
for cattle on auction and drives prices down. When prices are low, the
packer buys cattle on the market.

Some will argue that the livestock market is a North American market,
and the farmer will see his calves move all over the continent, just as
the feedlot owner sends his fat cattle to slaughter plants across North
America, wherever the price is best. There is a degree of truth in that,
at least when BSE or some trade irritant isn't closing the border. But
even in the North American market, there are only a handful of major
players. In the event of a border closure, such as may occur in a de
facto way with implementation of Country of Origin Labelling in the
U.S., the Canadian packers will be reduced in number and will be more in
the driver's seat than ever.

The difficult truth is that the packing industry catches farmers between
a rock and a hard place. Extremely large packing plants offer economies
of scale and economic power that make it difficult, if not impossible
for small plants to compete. These same economies can make our beef
competitive in world markets. Extremely large plants mean, however, that
there are only a few of them. This concentration usually means packers
don't need to pass the benefits of monopoly and economies of scale back
to feeders and hence to farmers.

It seems then, that we are stuck. We have too many cattle for domestic
demand and too few buyers to ensure competitive bids. But we are not
going back to the days of many small packers any time soon. Indeed, if
Tyson is right, we may see fewer packers still, as cattle herds shrink
to fit the new economic realities.

The Tyson deal will still have to clear the Competitions Bureau but
don't expect this toothless tiger to stand in the way. It would be best
for all concerned if the Lakeside plant went to a third party. In the
highly concentrated beef packing industry, that is not likely to happen.

The game is still very much afoot for cattle producers. With declining
cattle numbers, continuing high grain prices and COOL rearing its head
this fall, they have much to be concerned about.

(c) Paul Beingessner

Global Forces Will Challenge Agriculture

2008-07-01T20:46:00.001-05:00

Column # 676 Global Forces Will Challenge Agriculture 30/06/08

There are a couple things that will dramatically affect farming in the
future - forever. Well, at least as far as anyone can see. One of those
is the shrinking supply of cheap fossil fuels. The other is climate
change brought on by world-wide use of those dwindling fossil fuels.

Increasing fuel costs will impact agriculture in ways we have only begun
to imagine. They will be especially large in a country like Canada, a
country with small population and a large export agriculture industry.
Our small population means we have to export a lot of our production if
we are going to stick with large-scale export-oriented agriculture. The
trouble is, most of our customers are a long way off, and the increasing
cost of ocean freight, driven by fuel costs, is already impacting our
competitiveness. Countries like the Ukraine and Kazakhstan will have a
big advantage over us in Europe, while Australia is much closer to Asian
markets than we are.

Even the population centres in eastern Canada are far enough away that
they might look to the U.S. before they consider western Canada as a
supplier.

Rising fuel costs also mean an increase in just about every farm input
you could imagine. Fertilizer and diesel fuel are the most obvious and
frightening. Already sky-high fertilizer prices are now predicted to
skip their end-of-season drop and continue climbing throughout the fall,
winter and next spring. Note that farmers in many other parts of the
world pay much lower prices for nitrogen fertilizer. Don't expect us to
benefit from this, though, because the cost of importing fertilizer will
continue to increase as a result of, you guessed it, rising ocean
freight.

It is also tough to imagine industrial agriculture cutting its
consumption of diesel fuel much. Farmers have largely adopted minimum
tillage, so there are not a lot of gains to be made on that front. About
the only significant savings that could be made here would come if
farmers quit buying those tanks disguised as farm trucks and went to
something smaller. Of course, that would imply the automakers would have
to build something smaller and more fuel-efficient.

Global warming is the other horseman of the Twenty-first Century
Apocalypse. Yes, I know there are still some who say global warming is
not the result of human activity. I am also aware that more than 500
years after Columbus sailed the ocean blue, there is still a flat earth
society. So don't expect the Fraser Institute to go away anytime soon.

Whether you believe global warming is human-caused or not, it is
happening. Polar ice is melting, glaciers are receding, increasing
temperatures on the Canadian prairies are a reality, and rainfall
patterns are becoming erratic all over the world. Unlike the myopic
folks who ask what's not to like about a longer summer, I don't like it
one bit. Anyone who makes a living off growing plants should take a look
at British Columbia's forests if they think warmer weather will be a
boon to the ecosystem. BC has been denuded because the Mountain Pine
Beetle is no longer kept in check by cold winters.

A warmer prairie climate will bring with it a host of new insect
plagues, along with a migration of such lovely diseases as elephantiasis
and dengue fever, which normally could not survive our climate.

Farmers may have a longer growing season on average, but how will that
help if there is no extra moisture to take advantage of it? Rather,
production will be an increasing challenge with hotter, longer summers.
New crop varieties will be needed to cope with these changes. All types
of fall seeded crops might be one answer to the heat problem, but this
will take a lot of research. At the moment, Canada shows no sign that it
understands the vast increase in research that will be necessary to
sustain agriculture and feed the urban masses in their condos.

The point about research is most disturbing. All governments in Canada
appear oblivious to the challenges agricultural production will face. If
you thing that's too strong a statement, take a look at the budgets of
ag departments the country over. It is commonly understood that we are
close to, or have already passed the peak of oil production. Global
warming, if polar ice is any indication, is not going to occur over
centuries. It will be decades and years. Increased scientific research
will be absolutely necessary if we are to deal with the inevitable
outcomes of these earth-shaking events. Unfortunately, there is little
evidence the current federal government even believes these are serious
issues. Better, I guess, to piddle away the next couple years scheming
about the Canadian Wheat Board.

(c) Paul Beingessner

Paul dumped again...sigh

2008-06-25T00:54:00.003-05:00

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.

Conservative's CWB Strategy Loses in Court, Again

2008-06-23T21:50:00.002-05:00

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

Farmers Pay the Piper, Someone Else Calls the Tune

2008-06-16T13:51:00.002-05:00

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

American Farmers Get Break on Parts

2008-06-10T00:59:00.000-05:00

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

Bemoaning the State of the Beef Industry

2008-06-10T00:57:00.000-05:00

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

Joy in Mudville

2008-06-10T00:55:00.001-05:00

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

When Mud Pies Are No Longer a Game

2008-06-10T00:53:00.000-05:00

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

Viterra Takes a Page from Monsanto

2008-06-10T00:49:00.000-05:00

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

Saskatchewan RMs Take a Beating From Transportation

2008-06-10T00:44:00.001-05:00

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

Ask Me No Questions I'll Tell You No Lies 21/04/08

2008-04-22T05:05:00.000-05:00

Sorry for the delay here. Freezing rain took out the power for 12 hours.
Chilled calf to deal with. I have a litany of excuses....

Column # 667 Ask Me No Questions I'll Tell You No Lies 21/04/08

Few things are as frustrating to parents of teenagers as their
children's communication skills. Or lack thereof. Having participated in
the rearing of 5 teenagers, I've been on the receiving end of my share
of monosyllabic grunts.

"Have you done your homework?"

"Uhnnn."

Even worse for parental blood pressure is the answer that never happens.

"When are you going to get off your duff and do your chores?" Silence.
The only discernible response is a slightly more frantic blur of finger
and thumb remorselessly pushing buttons, as eyes remain glued to the
television.

Of course I would never admit to the near uncontrollable urge to slap
someone up the side of the head. (Can the welfare still come and take
your kids when they're grown up and gone?)

There are many similarities between politicians and teenagers, most of
them centering on fabrication and a ceaseless focus on whether the
outcome of any situation will be good for me personally. Politicians and
kids share another similarity. It's the ability to completely ignore a
legitimate question, as if the questioner were one of those irritating
800 area code calls that we don't answer when they appear on our phone.

How many newspaper articles end with "the government has made no
response to the request"? How many radio interviews conclude with "no
one was available for comment"? For someone with a valid and important
question, it can be infuriating and disheartening.

Take, for example, the plight of hog producers in Canada. Repeated
requests for aid early this year were met with silence. It looked as if
governments had decided to take the course of letting the chips fall
where they would as far as hogs were concerned. Saskatchewan Minister of
Agriculture, after announcing a loan program, (gee, more debt, thanks a
lot) declared that his government had done all it could. The federal
government finally decided its assistance would be to kill as many sows
and boars are producers were willing to part with.

Right now, OmniTrax, the American company operating the rail line to
Churchill, must be feeling a similar frustration. OmniTrax is watching
the federal government preside over the chopping up of the fleet of
aluminum hopper cars. While the cars are pretty much obsolete for
hauling grain on Canada's mainline railways, due to limited capacity,
they might fit into the local hauling of products on the Bay line.
However, the dismembering continues and the federal government appears
to be ignoring OmniTrax's request for dialogue on the cars.

Beef producers know their own frustration with government silence.
Restrictions on the disposal of Specified Risk Materials add as much as
$80 to cost of slaughter and processing for a beef animal in Canada.
These are costs American packers do not bear, since their regulations
are much less strict. This cost puts Canadian packers at risk, since the
market in which they compete is largely continental. Continued requests
for the government to deal with a problem that is beyond industry's
ability to control have been met with little acknowledgement.

Government communications, of course, are not about facts or truth. They
are about spin. Unfortunately, this appears to be true of most
governments most of the time. If government thinks the public wouldn't
like the answer to a question, better to remain silent. One place this
may not work is in the House of Commons. However, when confronted with a
question that you can't avoid, politicians can still take another
course. Don't answer the question asked, answer some other question.

This was the situation facing Liberal MP Wayne Easter on April 8. Easter
asked Transport Minister Lawrence Cannon if the government intended to
conduct a full review of railway costs. Cannon's response must have left
Easter scratching his head. It went like this, "One of the first
initiatives we took was to stop the sale of the hopper cars (to
farmers). It was an excellent decision because it was something the
marketplace wanted. ...it was a way of diminishing and reducing costs to
the farmer."

It makes me think even politicians in the House of Commons must
occasionally want to slap someone up the side of the head.

(c) Paul Beingessner

Piglet Kill Proposed to Solve Hog Woes 14/04/08

2008-04-22T04:12:00.004-05:00

Column # 666 Piglet Kill Proposed to Solve Hog Woes 14/04/08

In virtually every farming enterprise, farms are getting larger. One
factor that has driven this is the ever-declining value of the
commodities farms produce. In constant dollars, the value of farm
products, whether grain, livestock or Christmas tree has not kept up
with every other cost farmers face. Farmers have survived by producing
more of those products per farm. So farms get bigger and rural
communities smaller.

If production were simply a matter of management, good farmers would
survive by getting larger. The less productive would fall by the
wayside. But it isn't that simple. A major reason is the incredible
unpredictability of both weather and prices. If you're losing money due
to low prices or poor production, being big is likely a greater problem
than being small.

The other problem with bigness is that everyone is on the same
bandwagon. The result is the consolidation of grain companies, chemical
and seed companies, machinery manufacturers and even input retailers.
Even the biggest farmer is no match for a Monsanto, Cargill or CP.

Nowhere can the problems of bigness be more clearly seen than in the hog
industry. At some point in the last century, governments and policy
makers became convinced there was an unlimited market in the world for
pigs. The rational was that as poorer countries developed, meat
consumption would rise, and since hogs and chickens are cheaper to raise
than cattle, they would be the ones in greatest demand. Policy makers
began to push hog production. Provincial governments all had their own
units within their departments of agriculture dedicated largely to
increasing the number of hogs produced in the province. Pigs would eat
the cheap feed grains. Pigs, which can breed like rabbits, could build
populations rapidly. Canadian pigs would be travelling the world. Raise
enough pigs and the processing facilities would come.

There were several problems with the whole scenario. Large hog barns
could indeed produce hogs cheaply. So cheaply, in fact, that soon small
producers were unable to cope with the ever-falling prices. They did
what hog producers have always done when markets fell. They went out of
pigs. The large ones left didn't respond to market signals in the same
way. They couldn't afford to shut down or limit production, thus
ensuring perpetually low prices. (Truth be told, low hog prices have
hurt the beef industry as well, as hogs compete in the supermarket with
beef and limit its price.)

As for Canadian pigs travelling the world, it turned out most of them
only made it to the U.S. As in the beef industry, Canada became fixated
on selling our pigs to a country swimming in pigs itself. That we were
able to do so was largely because of our low dollar, not some mythical
notion of western Canada as the "lowest cost producer".

If current and past hog prices weren't enough to make you weep, the
impending closure of the American border to hogs due to Country of
Origin Labelling (COOL) should have hog producers everywhere sobbing.
Labelling hogs as products of somewhere other than the U.S. is expected
to lower their value, so American slaughter plants have also said they
will not slaughter Canadian hogs under COOL. Just the fact that COOL
appears to be coming this fall has whacked Manitoba's isowean producers
on the snout. Isoweans are early-weaned piglets, many of which are
finished in the U.S. Those for sale now might not finish before COOL is
implemented, so some American finishers have broken contracts to buy
Manitoba piglets. Prices for isoweans have dropped as much as 90
percent.

Canada now has a program to pay hog producers to kill sows and boars and
stop producing pigs. Manitoba producers are calling for a similar
program to kill piglets, saying a 4 percent reduction in supply would
help to increase prices.

The entire situation is both sad and revolting, especially the waste of
good food and the destruction of baby animals. The heyday of this latest
surge in the hog industry lasted scarcely more than a decade for many
producers. Some of the earliest barns were closing their doors due to
bankruptcy as the last barns were being built. Whatever the outcome,
there will be a major correction in hog numbers, especially in western
Canada.

No one should be surprised. The market for pigs in Manitoba and
Saskatchewan is for about 300,000 hogs per year. We are producing five
million, and trying to export most of the surplus to the U.S., a country
that is awash in hogs itself, and remarkably protectionist. It is as
absurd as Canadian farmers who think that without the CWB, we could pour
our grain into the American's premium priced domestic market.

The ultimate irony is that while the industry is near collapse,
Manitoba's hog producers are up in arms because the provincial
government won't allow any new hogs barns to be built due to
environmental concerns.

So, let's tally it up.
At one time we had a hog industry with thousands of small players who
sold to a variety of packing plants. These farmers responded to market
signals and were able to move in and out of the industry because their
capital investment was often small and they were diversified. Hog prices
were low, so focus on the grain side. Hogs rise, re-open the barn.

Now we have government subsidies to kill pigs large and small and
dispose of them. Packing plants closing in western Canada while the hog
supply grows. Small producers all driven out of the business. A bunch of
much fancier empty barns than the last time this happened. And
government agencies that still have a mandate, I'll bet you anything, to
expand the hog industry in western Canada.

They say pigs are the smartest animal in the barnyard. I'm beginning to
think they could well be smarter than a lot of humans.

Life Can Be a Bummer 07/04/08

2008-04-22T04:12:00.003-05:00

Column # 665 Life Can Be a Bummer 07/04/08

The subject matter for this story might seem a bit indelicate, but here
goes. We had a lamb born on the farm this year without a bum. Or, to put
it in language that might make it past the censor, it lacked an anal
opening.

As you can image, this is not good news for the lamb. Sheep are prone to
any number of deformities - cleft palates, missing eyes, spinal
deformations, and yes, absent orifices. The usual remedy to such
problems is a swift departure to lamb heaven at the hands of the
shepherd.

Our lamb was luckier, due to my reluctance to whack tiny bleating
creatures on the head, especially when they appear lively and happy,
with the innocence only a lamb can project. So when I noticed the half
day-old lamb lying on its side and straining in obvious discomfort, and
an inspection quickly revealed not even a trace of a rectal aperture, I
called my vet to seek counsel.

His outlook was gloomy. If the defect was severe enough, it seemed the
lamb might not even have a properly developed intestine. If so, it would
be dead by morning. If it were still alive, he could look at it then,
assuring me that it would be uncomfortable but not in a great deal of
pain.

At least the delay until morning would take part of the decision out of
my hands. If the lamb died, such was life. If it lived, I still had to
justify to myself the cost of the procedure, which I was pretty sure
would at least equal the value of the lamb full grown at market time.

As the lamb's luck would have it, she made it easily through the night.
I justified the decision to make the 40 kilometer trip to the vet by
hoping fervently that a small and simple, hence inexpensive incision
would right the matter.

Well, not quite. It turned out there was a quarter inch of tissue
between the lamb's smooth backside and his anal muscle. An incision
would simply grow shut. My vet's solution was to pull the anal tissue
forward and suture it to the outside. It was some pretty delicate and
nifty work. But it wasn't simple. A couple x-rays, some medication, it
all came to a bill for $140. Not much chance of making money on that
lamb. For the lamb, at least, it was a happy ending. She never looked
back and four weeks later I can't pick her out of the crowd.

It probably wasn't a real smart decision, and I likely wouldn't do it
again, despite my relatively soft heart. A livestock farmer can't afford
too many kind gestures these days if they cost money. The sad fact is
that today's livestock prices, and those of the last few years, mean
most farmers visit the vet only in extreme circumstances. The results
are sometimes not what farmers who generally love their animals would
really like.

Sheep may be an extreme example of this. There is almost nothing you can
take a single animal to the vet for that won't result in a bill greater
than the animal's value. Prolapsed uterus? We replace it ourselves, and
if we can't make it stay, we put the animal down. Impossibly large lamb
or a cervix that won't dilate? A caesarean is far too costly. Better, as
one vet advised me, to shoot the ewe and attempt to extract the lamb
alive afterwards. (It worked.)

The same applies to cattle, though there is of course more room to spend
money and still come out okay. Or, at least there was prior to the
collapse of the calf market last fall. More and more, farmers are
treating ailments that they would formerly have taken to a vet. If their
treatments fail, the cheapest alternative may be to put the animal down.

The problem is not with the rates rural veterinarians charge. They work
long hard hours and few make their fortune and retire early. The problem
is that the value of livestock has failed drastically to keep up with
the cost of living, or any other cost.

As I said earlier, no farmer wants to work outside his comfort zone with
animals. Nor does he want to put down an animal because routine
procedures are too costly to contemplate. Yet, there is no readily
discernible solution to this dilemma. Livestock prices will never move
in lock step with the cost of human labour or other inputs. The history
of modern agriculture is that prices for farm commodities have steadily
declined, relative to all other costs. Present government policies and
market trends don't appear likely to change that.

A partial solution to this sorry situation would be for governments to
financially assist rural vet clinics. If they could afford to lower
rates, farmers could afford to use them more. This would likely yield
greater returns to farmers and their communities than many of the
"value-added" schemes that garner government support. It should also
make the animal welfare folks happy. And it would keep life for lambs
like mine from being a real bummer.

Honorary Life Membership

2008-04-22T04:12:00.002-05:00

Well, bragging is always a bit pathetic, especially for a guy who's
passed the half-century mark, but I am going to run the risk that you my
readers will heap silent scorn on me for indulging myself. (Remember, I
said silent.)
Here goes.
At the annual meeting of the Saskatchewan Institute of Agrologists last
week I was awarded an honorary life membership. The Institute usually
awards a couple of these per year. This year, I was the only one. I am
pretty flattered by this, despite the fact that I think there was a
collosal mistake and there must be some other Paul Beingessner around
who deserved the honor. (Actually, there is another Paul Beingessner,
but he lives in Ontario so I suspect he is not the intended one.)
I know little about the SIA, except that a lot of the folks I know who
work in the agriculture field are agrologists, as they have to be by the
law that set up the SIA, but a lot of the folks on the list of honorary
life members are folks I know, or knew, and have a lot of respect for.
Anyway, if you want to see the list, google the SIA. It's a simple
website.
Thanks to Richard Marleau, who I met for the first time at the banquet,
but who is on my email list. for putting my name forward. Richard seems
like a very nice man, but apparently he is living proof of P T Barnum's
dictum that you can fool some of the people all of the time.
Regards
Paul Beingessner

Farmers Pay Hefty Price for Guessing Wrong 31/03/08

2008-04-22T04:10:00.001-05:00

Column # 664 Farmers Pay Hefty Price for Guessing Wrong 31/03/08

The end-of-March Pool Return Outlook from the CWB for wheat, durum and
barley is largely unchanged from the PRO in February. This means the CWB
has increasing confidence in these numbers and they are unlikely to
change substantially this crop year. In fact, the CWB has asked the
federal government to allow an increase to initial payments of some $50
per tonne for spring wheat and $80 for durum.

This will make 1 CWRS with 13.5 per cent protein, loaded in a producer
car in my home town of Truax, worth $7.56 net per bushel initially with
potential for that to rise to $9.27 a bushel if the PRO is realized. The
value of durum wheat is even more substantial. Number 1 CWAD 14.5 will
bring $12.09 a bushel initially, with potential for $13.36 by the time
the pool is finished.

However, not all western Canadian farmers shipping these grains will
realize these high values. Some who chose to sign up with the CWB's
Fixed Price Contracts (FPC) will pay a hefty price for trying to
outguess the market for red spring wheat.

In response to farmer pressure to be able to lock in prices early in the
crop year, and because of legislative change in 1998, the CWB began to
offer a variety of contracting options to farmers. One of these is the
Fixed Price Contract (FPC). Under this, farmers are able to lock in a
price prior to, and early in the crop year. Before this crop year
began, the FPC looked better than the PRO that was predicted for the
upcoming year. For example, the PRO on July 13, 2007 for 1 CWRS 13.5 was
at $228, while the FPC was at $245.46. Farmers who locked in that day
would be expecting a substantial return over the price obtained by
farmers who stayed in the pool.

Of course, what followed was a steady and remarkable upturn in grain
prices. The average FPC for the crop year was taken at $244.83 per tonne
for 1 CWRS 13.5. The current PRO is $388 per tonne, meaning the average
producer who signed a FPC has left $143 a tonne on the table. Since 3.5
million tonnes were signed up under the FPC, farmers have left an
astonishing $501 million on the table, compared to what they would have
received if they stayed in the pool.

Nor is this phenomenon unique to CWB grains. A farmer here recently
complained to me that by pricing his lentils early in the crop year, he
had foregone some $50,000 compared to today's prices.

Farmers in this position in Canada have much company in the U.S. The
average elevator bid in North Dakota for wheat equivalent to 1 CWRS 13.5
been $9.69 a bushel, but the average price actually received by farmers
in North Dakota to date has been $6.50 a bushel. Obviously, farmers
there also jumped into the market early when prices looked good compared
to last year's.

There are two points of interest here. Since the CWB developed this
option, farmers have sometimes done better with FPCs than those who
stayed in the pool. However, there is no doubt they guessed badly this
year. American farmers were no more astute. The other point is that
farmers who are now screaming about the current CWB prices for wheat and
durum, compared with U.S. elevator prices, are being particularly
cynical. Recently, a handful of anti-CWB farmers are arguing that the
CWB has failed farmers since the PRO is not equal to American spot
prices for today. Unless they are especially naïve, these farmers have
to know that such prices are offered only because there is virtually no
grain left on American farms. As I said earlier, the average North
Dakota farmer got $6.50 a bushel for his red wheat, not $20. He can only
wish he was in the enviable position of farmers in the CWB pool right
now.

Farmers with FPCs need to understand that, just as in the open market,
they must deliver their entire contracts to the CWB. They cannot be
short on tonnage or they will have to buy out their contracts. Since the
CWB sells futures contracts to hedge the FPCs, it must purchase them
back if farmers default on delivery to the contract. Farmers will be
billed for that buyout, which is based on the difference between futures
prices at the time of sign-up compared to futures prices on the day of
the buyout. The CWB has no choice but to hold farmers to these
contracts. As is the case for open market grains, farmers are obliged to
fill their contracts, and the mechanism the CWB uses to deal with
default is essentially the same as grain companies use with open market
contracts.

Buyouts can be extremely expensive. Currently they are running as high
as $200 per tonne, so if a farmer has signed up 100 tonnes but delivers
95, he could be on the hook for $1,000.

Another issue facing some farmers is that when they deliver to an
elevator they will receive the initial CWB price. The elevator does not
know the value of the farmer's FPC. If the initial is higher than the
FPC, like it is now, the farmer will then receive a bill from the CWB
for the difference. Currently, there are hundreds of thousands of tonnes
of grain in this position. Farmers should understand why this is
happening.

Lastly, price pooling has been getting a bad rap in some quarters. There
is no doubt that in a falling market, it can be profitable to take a
FPC. In a rising market, it is not such a good idea. How good are you at
guessing which type of year it will be? This year, farmers in the U.S.
and Canada have guessed wrong and the consequences are huge. Price
pooling looks like a pretty good deal after all.

Government Scolding Not Too Effective

2008-04-22T04:06:00.002-05:00

Column # 663 Government Scolding Not Too Effective 24/03/08

Farmers are generally pretty happy about the price of grain these days.
The exception would be livestock farmers who are acutely aware at the
moment that one person's meat is another's poison. Whatever their mental
state, farmers are universally concerned that the price boom for grains
will largely be snatched away by input suppliers. Even the House of
Commons Standing Committee on Agriculture seems mildly concerned.
Members of that committee gave a browbeating to some input manufacturers
a couple weeks back, which is usually about how far such things are
taken by the House. Politicians seem to think a good scolding will do
the trick of getting these folks to act reasonably. Fertilizer suppliers
around here must have thick skins, because it hasn't worked on them so
far.

If the government really wanted to improve things for farmers, there is
lots it could do, and a few things it should think hard about not doing.
Agriculture Minister Gerry Ritz's obsession with getting rid of Kernal
Visual Distinguisability (KVD) is one of the latter. I would agree that
KVD should be eventually eliminated. It does indeed have some impact on
the ability to improve wheat varieties. The grain industry collectively
was on target to do this before Ritz cracked open Pandora's box by
announcing it would be gone by the start of the new crop year.

Even Ritz's advisors at Agriculture Canada were against the hasty
agenda, telling the Minister that the industry is not ready for this and
it might affect our ability to convince our customers they are receiving
their customary quality. One rumor I've heard is that grain companies
have been mumbling about raising their elevation fees by $4 a tonne to
manage the risk that will come with the end of KVD. I will admit that
single-mindedness can sometimes be a virtue. In the case of the
Agriculture Minister, it looks more like stubborn foolishness.

Nor will ending KVD bring immediate rewards. It takes years to bring new
varieties to market, and a firm date of 2010, as the industry was
proposing, would have allowed two things to happen. It would have given
plant breeders the go-ahead signal to move these varieties and research
forward, and it would have given the industry a deadline to meet to deal
with the effects of the move. In this case, the Minister should have
taken his own mantra to heart - "Lead, follow or get out of the way" -
and gotten out of the way. If farmers face financial repercussions
because of this move, years before they see any benefits, they'll know
whom to thank.

In the realm of doing something that would truly benefit farmers, the
government should consider taking some firm action on the transportation
issue. Grain shippers have been especially concerned with the railways'
performance. For example, on average for 2007, the railways provided
only 52 per cent of the rail cars ordered by the CWB when required,
compared to 83 per cent in 1999. That is a 31-per-cent service decline
over the last eight years.

The government stated its intention to conduct a review of rail service
when Bill C8 passed the House. Since this has happened, we can only wait
for the Minister of Transport to give us details on the review. Farm
groups are pressing for the government to also conduct a full costing
review for the grain industry. The last review was in 1992, and farmers
are now paying excessively for service that is mediocre at best. When
the Western Grain Transportation Act was passed, a contribution to fixed
costs equal to 20 percent of variable costs was deemed a suitable return
to the railways. Estimates show that this number has ballooned to over
50 percent.

A re-costing could save farmers many millions of dollars while
reflecting the real costs to the railways along with an adequate
contribution to fixed costs. The government could take this step, and
give the railways a scolding as well. That would satisfy political egos
while actually accomplishing something concrete. It would be a nice
change.

Farmers Drowning in Hogwash 16/03/08

2008-03-30T04:10:00.003-05:00

"Hog outlook bright despite tough time"
The headline blaring from the page in a recent Manitoba Co-operator
would have been funny if the topic wasn't so serious. It could also have
been accompanied by a couple other adages like "It's always darkest
before the dawn" or "It's better to light a single candle than to curse
the darkness". If a person had a nickel for every prediction that good
times were just around the corner for the hog industry, you could
probably buy a hog barn and fill it with stock.

Actually, the barn might cost you something, but the stock could likely
be had for free. Another farm paper, the Western Producer, carried a
story the same week about the inability of farmers to get anything at
all for cull sows and boars. One Alberta hog farmer was told he would
have to pay four cents a pound to get someone to take his cull sows.

All this is occurring because there is an oversupply of pork, a
non-competitive processing industry, high feed grain prices and so on.

The problem is similar in the cattle industry. Canada's current cowherd
was built on the prospect of free trade and the reality of a low
Canadian dollar. Unfortunately, a high Canadian dollar pretty much nixes
the benefits of free trade, which hasn't been all that free lately
anywayy. Some analysts predict that with grain prices likely to remain
high for some years, the Canadian cattle herd will shrink back to a size
that fits the domestic market.

It is, after all, about supply and demand. If there is no demand for
beef at higher prices, and today's prices make a farm unsustainable,
farmers will leave the industry, supply will decline and prices will
rise correspondingly. No one really doubts that this will occur in the
beef industry. That it isn't happening yet in a significant way probably
reflects the fact that farmers usually hang on a year or two after the
market tells them to get out. It's like you can't believe the family dog
bit you until he does it again.

So in the free market, the same thing should happen to the hog industry.
Right? But hogs have been an unrelenting disaster in Canada for years
now, sustained only by repeated government bailouts to the industry.
Short of bankruptcy, which did take down quite a few barns in western
Canada in recent years, hog producers remain stubbornly productive. The
once-reliable four year hog cycle has been stuck on permanent press now
for quite a while. Despite this, producers have failed to be squeezed
out, as markets would say they should. Now, we even have a government
program paying farmers to kill their sows and boars, in an effort to
force the downsizing that obstinately hasn't occurred.

There is a simple reason for the failure of economic theory here, and it
is centred in the factory hog farm. When hogs were produced on thousands
of family farms, dozens here, hundreds there, farmers easily shifted in
and out of production as prices dictated, thus setting up the
predictable cycle.

Large hog farms cannot afford to do this, considering the huge amounts
of capital they have tied up. They must produce, even if the margins are
zero. Things have to become excruciatingly bad for the big guys to
leave. With all the small producers gone, the market cycle just doesn't
work.

Cattle respond to a longer cycle, more like ten years. With thousands of
cow-calf producers, the cycle will assert itself. With high grain
prices, ageing farmers, and paltry returns, many will leave the
business, never to return. But look at what is happening to the cow-calf
industry. Economics dictate that herds today must be huge to produce any
kind of return. While the average herd is still around 60 cows, there
are increasing numbers of farmers running 400, 500 or 1,000 cows. And
these folks are not mixed farmers. That many cows don't leave a lot of
time to grow grain.

There are some parallels to the hog industry here. Cattle producers of
this size are not reducing herds in response to low prices. Many are, in
fact, expanding, taking advantage of fire-sale cow prices.

Given this, will the cow cycle begin to break down, as it has for hogs?
Will we eventually see the government paying farmers to shoot cows and
dump them for the coyotes in order to get the price back up? I figure
that day will come right around the time we start to see headlines
predicting a rosy future for the cattle industry just around the corner.

(c) Paul Beingessner Column # 662

Farmers Guess Badly on Wheat Sales 22/10/07

2008-03-30T01:57:00.004-05:00

Western Canadian Wheat Grower vice-president Stephen Vandervalk is no
quitter. Despite showing the world how wrong he was he isn't giving up
on his diatribe against the Canadian Wheat Board.
In August, the feisty Albertan ranted against the CWB's Pool Return
Outlook (PRO) for barley. He trumpeted his own cleverness at selling
much of his yet-unharvested crop before the CWB announced it would
challenge the federal government's attempt to remove the single desk
from malt barley and exports of feed barley. That challenge, according
to Vandervalk, caused the price of feed barley to plummet and cost him
big bucks on his remaining unsold stocks. As to malt barley, Vandervalk
said a maltster offered him $4.75 a bushel for his. The court case put a
stop to that and he claimed the lower price the CWB was projecting would
cost him dearly.
A short month later, Vandervalk should have been gnashing his teeth. The
September PRO was projecting $5.43 for malt barley at his Alberta home
and the feed barley he pre-sold for $4 was projected to be worth $4.64
delivered to the CWB. Vandervalk lost big all right, not because of the
CWB, but because of his own feed barley marketing folly. The CWB court
case saved his from making the same mistake with his malt barley.
Rather than be chastened by his marketing failure, Vandervalk continued
on his quest to damn the CWB. In late September, he was showering farm
newspapers with information comparing U.S. elevator prices to the CWB
PRO. According to these figures, Vandervalk was losing a small fortune
because he could not sell his durum across the line. Comparing the
elevator price in Montana, which hit $13.10 a bushel that week to the
CWB PRO of $10.70, Vandervalk's estimated deficit would be $151,000.
You have to give Vandervalk some credit here. Despite being prevented
from ever marketing his own durum by the CWB monopoly, he apparently
would be far better at it than most American farmers who do it all the
time. According to the marketing director of the North Dakota Wheat
Commission, most durum farmers in his state missed out on the high durum
prices because they sold earlier, at much lower prices. Those prices
looked good at the time and no one was projecting the heights to which
durum would soar. Nor were North Dakota farmers the only poor marketers.
Wheat farmers in Washington state also blew it, selling some 70% of
their crop before prices reached their highs. As much as 50% was sold at
values roughly half those available today.
If Vandervalk were selling his own durum, it seems safe to assume he
would have done what he did with his feed barley - sell much of it early
for what appeared to be good prices. It is unlikely he would have had
enough foresight to wait until the day it hit $13 at a Montana elevator.
It is also unlikely any Montana elevator would have been able to absorb
his reported 63,000 bushels in one fell swoop.
Luckily, and despite his efforts to the contrary, Vandervalk has the CWB
to protect him from his misadventures. No, the CWB will likely not sell
all of western Canada's 4 or 5 million tonnes of durum at $13.00 a
bushel. The U.S. can absorb only a small amount of our durum. The rest
will be sold over the course of the crop year for various prices to
various countries. And it will incur some large rail and ocean freight
bills. But this year, the CWB will likely return far more to durum
farmers in western Canada than their American brothers will receive,
since much of their durum has already been sold for a relatively low
price. Stephen Vandervalk is one of those lucky Canadian farmers, and if
he were honest with himself, he would admit it.
(c) Paul Beingessner Column # 642

Paul Beingessner

2008-03-21T03:40:00.000-05:00

Paul Beingessner is a farmer and journalist from Saskatchewan whom I greatly admire. His knowledgeable articles on rural issues appear in many small-town papers across the prairies as well as in farm journals. He scathes the politicians and corporations who escape the scrutiny of most of the city-based media, even though the issues do also affect urban people in food prices and the countries economy.

The New CBC

2006-12-20T21:03:00.000-06:00

The CBC has been a canadian institution. A source of truth in an ever-deceitful world. They got it wrong on many occasions, but they didn't appear beholden to the large corporate behemoths who controlled the dispersion of media events, and also appeared as an 3rd party source unfettered by government or corporate control.

Unfortunately that is no longer true and I mourn their passing. I just sent this message to the CBC newsroom in the somewhat vain hope that some there might try and ressurect their once proud tradition. even if it is in the form of a blog. There are many extremely capable journalists out there and few canadian blogs reflect that.

Here is a note of protest sent to that audience. I hope even one CBC journalist responds to it.

What on earth is happening to CBC. It's as if the news department has turned into Fox Broadcasting, that notorious US adjunct to the US State department. Similarly the CBC echo's many of the right-wing positions uncritically. Has the CBC simply become an adjuct of the ruling government of the day, a shadow of the controlled press they critisize ?

Aside from the abysmal set-up program on the National which tried to convince canadians to join the war on mid-east people by using local arabic quislings to present the case, the CBC has more and more simply thru local programming shown the obvious that canadians oppose the war and our role in the occupation of Afghanistan. Despite that the National and CBC hiarchy has presented programming which glorifies our role in Afghanistan as peacekeepers rather than occupying troops of an army headed by the USA. Each pronouncements by a canadian General lusting for bloody glory has been uncritically transmitted and propaganda worthy of the KGB about supporting our "boys" has occupied the news, including long newsclips showing the families back home.

But the body bags and injured soldiers keep increasing, as we learn the hard way as others have in the last century, including the British, Russian, and our own soldiers, that the Afghani ar ungovernable.

What is different is that the fundamentalist Taliban with it's Al Qua heda intelligentsia as set up and supported by the US in order to embarass the Soviet Union has now assumed a life of its own and the US supported Northern warlords are just as bad. The US has become the greatest creater of strife in the middle east (including it's uncritical and opportunistic support of the theocratic state of Israel.), surpassing even the British in it's clumsy attempt to aghieve domination of oil supplies.

The US designs are not very subtle yet CBC insists on presenting it in the US mold, Canadians are in Afghanistan to achieve a democracy implant.(whether Afghanis want it or not).

It seems however that CBCs news-room is a capture of the Harper right.

So stories about the attempt by the conservatives to abolish the Wheat-Board are presented as a fight between the MONOPOLY wheat-board and the free traders. Despite the fact that without the wheat-board small farmers would be at the mercy of the big corporations like Cargill or Agricore. In every newscast the conservative touchword MONOPOLY appears, despite the fact that corporate monopolies are what the farmers banded together to oppose in the 1930s.

In Manitoba the brain-addled or Donald Blenhem influenced newsroom ran with the Fraser Institute press release which showed that Manitoba ranked first in charitable donations in Canada. It was however 27th as compared to the Maryland, US first. The press release also didn't mention whether that included corporate donations, which can give considerable tax release to corporations.

An additional news-release statement from the right-wing Fraser institute (who wants to privatize any government institution, from the provincial hydro. phone companies and medicare) implied that the fault was with the social welfare institutions who gave the impression that the poor were taken care of. (The logic being to do away with these impediments to charity by the wealthy). Their logic flies in the fact that Manitobans elect a government which despite it's faults plays to the support of those less fortunate.

However the machinations of the Frase Institute didn't even impinge on the news report of the fearless, eagle-eyed denizens of the CBC news-room. Yellow jounalists, complacent collaborators, reduced to the status of government mouthpieces as in Latin America ? Certainly not what I would expect from canadian jounalists or the journalists being defended from death by PENN. Simply careerist slime.

As an old friend of mine, a reporter for the Montreal Gazette, Nick Auf Der Maur would say, "there are swine, and then there are journalistic swine. They simply shadow the editor, who's also a swine."

Whoa Suzanna.

Letter to My American Neighbours

2006-08-01T23:00:00.000-05:00

These are terrible times. The US has become the state that many of us feared they would become without the counterweight of the Soviet Union. Not that the Soviet Union was a force for democracy or justice, but that they contended for the approval of the world's people.

Without contestation, the US has become the new Romans. They support and impose their majesty on any nation that impedes their imperial aims. With "Democracy" as their war-cry they invade any nation that will not bow to their aims, which is not democracy but subservience. Their "New World Order" is simply a catch-phrase for imposing an imperial regime on the world. They stand for the impoverishment and subservience of all peoples for the enrichment of the US. The decimation of Lebanon by the theocratic terrorist state of Israel, maintained economically and militarily supplied by the US is only the beginning. Syria is the eventual target by the most powerful military regime in the mid-east, which also has atomic bombs, Israel.

The only thing that has impeded US imperialist designs is the heroism of the Afghani and Iraqi people. Had they achieved an easy victory oil-rich Iran would have been an easier target, sandwiched as it is between Afghanistan and Iraq. Close by is also the repressive US client-state of Saudi Arabia. But puppet states are not easy to establish.

And of course there is also the countries such as Venezuela, the 3rd largest supplier of oil to the US who is using oil revenues to help their people, rather than enriching big US oil corporations, not to mention Cuba which has been a thorn mainly because they defied American might because the people supported the government, nor Bolivia which has defied the US and would use oil revenues to raise their people above impoverishment. These people can thank the Iraqui insurgents, otherwise they would likely be invaded, like Guatamala so many years ago. Or Grenada, or Haiti, or the Dominican Republic, or Chile under the supervision of the CIA, or Nicarauga by Olier North, and so many other countries. The "Empire" is getting short of troops for it's nefarious ventures.

Hopefully because the american people are waking up and are no longer willing to fight for the profits of corporations cloaking themselves as patriots. "The Rights of Man"by Thomas Paine, one of the great fathers of the American Revolution should be a required readings in schools to counter all the crap that now seems endemic and accepted across this once great country. Lack of dilligence was why Hitler gained power in Germany. Forgetfullness of the values which formed your country is why the US seems destined to the same fate.

Since at this time the US is embroiled in an imperial war, which like in Viet-Nam they will not win and there is an immense deficit of $3 trillion, one can only imagine a bad outcome which WILL affect the American people. A collapse of the US and world economy. Hopefully the US populace will wake up before this happens and somehow manage to turn things around.

As a canadian, whose parents were born in the US, and will also suffer from this US folly, I can only hope that the original beliefs of the constitution of the US will once again resurface and reject the birthing of a fascist America.

2006-05-09T19:20:00.000-05:00

I haven't posted much lately. Perhaps the "Shock and Awe" policies of western governments have rendered me speechless in the absence of any meaningfull response from the populace. I've also had consideral personal events to deal with. Mea culpa. Depession at the general world situation is no argument. Strangely I've also noticed a falling off in the posts of many articulate leftist bloggers. Perhaps my general malaise is shared.

Nevertheless I must continue, if only not to view myself much like the old gentleman in my village who would holler loudly and expond righteously in answer to the Sunday religious radio broadcasts. I find myself at times responding to some CBC broadcast with angry curses and cries of "Bullshit", "effing Fascist", or "yellow journalist doing a rotten spin".

So if anyone actually reads these missives I have a vehicle that says I'm not an insane antagonist ranting about nothing.

My intentions are to give an alternate view to the common responses to the issues that bedevil us.

Instead of just cursing the idiots that plague us I hope to advance what I think are rational ideas. We'll see if my intentions are followed up with my present resolve.

2006-04-20T17:46:00.000-05:00

Stephen Harper and his Conservatives may have bit off a bit more than they can chew. Even in Staunch "family values" territory like the prairies support for his $100 a month proposal which scrapped the liberal proposal for establishing a Public Childcare program based on the lauded Quebec one has less than passing grades.
For those working parents desperate for childcare with few affordable options it is a slap in the face.

Neither G8 nor Live8 Will Ease 3rd World Poverty

2006-04-07T09:18:00.000-05:00

Monday, July 25, 2005

It's like a circus. While the G8 meets to determine how to dissect the body of the world, a world-wide celebration holds court on your local television screen decrying 3rd world poverty.

Wowee !! A big extravagaza uniting all the wealthy rock stars and their fans in an effort to mitigate collective guilt by having fun, as Geldorf once more unleashes his minions in an attempt to ressurect his faded career and the entertainment industry makes $millions. He and the other poster children still can't comprehend that charity won't ease the suffering of the impoverished of the world. Only throwing off the yoke of neoliberalism will.

That means opposing the G8, WTO, the IMF, and all the phony aid organizations who simply extend justification for the rape of 3rd world people. The genecide of the people of Dhafur won't end no matter how much aid is given. Only a concerted effort which also includes aid but more importantly UN troops to stop the genecide and relocation policies of the Sudan government can. While hands are wrung over how horrible the Ugandan massacres were, and why the west didn't step in, another genocide is taking place which the world more or less ignores.

STOP THE DHARFUR GENOCIDE NOW !

The parable of the hatchet or the nonsense of nation-building in Afghanistan

2006-03-20T07:58:00.000-06:00

Guardian Unlimited | Special reports | Robert Newman: It's capitalism or a habitable planet - you can't have both

2006-03-20T05:26:00.000-06:00

Time to redefine ties with U.S.

2005-08-24T23:04:00.000-05:00

I am continually amazed by the "inyerface" pronouncements of Loyd Axworthy, present head of the Univerity of Winnipeg and former Foreign Minister of the Liberal government. (see a previous article in good newsclips.)
I had assessed him as a waffling "liberal" when he occasionally came out with media-warranting positions during his tenure at a US college. He was as dissappointing as John Kerry is to centrist Democrats.

But suddenly LLoyd has become a tiger. I have to wonder if he is trying to do a Diefenbaker. Presenting a populist alternative to the waning Martin forces. But he is coming out too true, too passionate to simply be a "contender". Whatever his motives he's speaking with a straight tongue and I applaud him.
Here's his Toronto Star article. Just click on the header.

AlterNet: Darfur as a Resource War

2005-08-24T22:19:00.000-05:00

As the deaths mount from the Dharfur genocide in Sudan, the seemingly senseless depopulating of the region is played up in the international press as a fight between opposing theologies, and also as a welcomed example in the west of the ruthlessness of Islam. "The poor people of Africa" is once more ressurrected and western youth are brought to tears by the sight of a starving baby attempting to receive nourishment from the unresponding paps of it's starving mother. Live 8 becomes a rockfest to divert western youth from righteous anger and oligarchy-threatening real analysis and activism, and accepting a "gods will" explanation of the tragedy which can only be answered by "charity and good will".

The increasingly evident reality of our age is that OIL RULES. From the Iraqui war and the Afghanistan venture propelled not by democratic or anti-ben Ladin motives but by the push to get a pipeline across Afghanistan for Uzbekistan oil as US and Euro corporatiopns vie for dominance.

US client states in Afghanistan and Iraq on each of Iran's borders also constrain the Iranian Theocracy. As the US and it's allies continously strip the Soviet Union of it's old components thru the use of powerful internal agents and propaganda, it will undoubtably encounter more opposition from China. China, as it's burgeoning economy expands it's imperialist (capitalist) economy is also contending for oil in these regions, which are closer to them than the western powers. Japan is also in competition for needed oil resources and US complacence as to Japan's loyalty should not be taken for granted.

Some of the new front-lines in the OIL-WARS might well be in the Gulf of Guinea, but the sad reality is that the oil-crunch is rapidly approaching as most scientific researches have shown. That more oil is being used than is possibly able to be produced. Many of the scientists prognosticating this scenario feel that the world isn't listening, but I believe that the world powers are well aware of it and just getting into jockeying positions.

The article linked to, presents a different take on the commonly accepted view of southern Sudan.

Somehow, Canada Got It Right

2005-08-11T15:10:00.000-05:00

I'm not usually a fan of the appointments of the US and corporate-friendly Martin government, but someone in the vast Liberal apparachnic has got it right. From the appointment of the previous Governor-General Adrienne Clarkson who did so much in presenting our country, to the new appointment of Michelle Jean, it does make me proud of being a canadian.

But really, a black female Haitian quebecois journalist as the (admittedly token) head of state ? Damn !! Hallelu'jah !!

Maybe I've already died and this is only a fantasy projected by the gods. Or else possibly I smoked too much dope in depression after I dreamed Martin had appointed Ernest Manning as Gov-Gen and I haven't yet awakened to reality.

Hopefully it will also lead to an awareness of the present shameful actions in Haiti of Canada acting as a junior surrogate of US repression in one of the first nations historically to successfully rid itself of colonial rule(French)in the Americas. The masquerade of corporate interests appearing as benefactors but in reality the architechs of the impoverisment and starvation of the Haitian people must end. And Canada's complicity as a surrogate police force for US corporate interests is not what we pride ourselves on in appointing Michelle Jean as G-V.

Revamping This Blog

2005-05-25T04:09:00.000-05:00

I have moved all the previous content of this blog, which had become a repository of my own and other writings to " Writings From Out Here".
My original concept was to give a focus to the concerns of prairie people to events , local, national, and international which are not served by the general media. Hopefully I'll have the energy to produce regular rants and commentary which will reflect our concerns and might also interest people from other regions of this ever-contracting world.

Our World is Not For Sale

2004-08-21T00:51:00.000-05:00

I think even more important in my view, is the fact that across the world, no matter where you are, you can be in Canada, you can be in India, citizens are coming to the same common conclusion. Everywhere people are saying our world is ours to shape and make.

Our world is not for sale.

We will not have five companies controlling water.
We will not have three gene giants controlling seeds
and pharmaceuticals and medicine and killing us for
their profits. We will not have two or three grain
traders destroying the rightful livelihood and earnings
of hard working farmers around the world and selling
junk food and hazardous food to the consumers.

Dr. Vandana Shiva

After many years of living in cities, I've retired to my natal area in central Manitoba. My father was a grain elevator agent for the now-conglomerated United Grain Growers and I remembered a somewhat bucolic place where people lived a simpler and healthier life. Game and fresh farm produce were cheap and plentiful, and people were helpfull and friendly.

What I returned to after more than 50 years was sadly, and perhaps understandably, a different world. Like the outports of Newfoundland and the Gaspesian settlements so promoted by the church and Duplessis in Quebec, the western prairies are abandoned cultures. Dying towns struggle to survive while the rural populace is more and more forced into city ghettos.

The young leave to find jobs which are unavailable locally and the older people remain in houses that have lost their value but which they are loathe to abandon. Half-way from my village and the regional center is a town that 40 years ago was a thriving community with 5 implement dealers and the usual complement of stores and services. It is now reduced to 30 people and no stores. They must drive 20km to buy a loaf of bread or a bottle of aspirin.

During the depression years of the 30s rural people fought back against the banks, grain cartels and large corporations, and they established institutions like the Cooperative movement, Pool elevators, credit unions, marketing boards, and political parties like the Progressive Farmers, and the CCF (social democrats).

They forgot to teach their children that the wolves are always there.

I returned to a desperate countryside where farms had been reduced to 1/3 of their former number, implement manufacturers and grain buyers had been onglomerated, and the protective organizations had been institutionalized(castrated). Aid to farmers was a cash cow to the agricutural corporations who receive millions while the struggling small farmers receive a pittance.
Similarly in the recent BSE crisis the ones that benefited were the few large packing plants still remaining, while ranchers received a fraction of the prices beef was sold for in the supermarkets.

Ranchers had been convinced by large corporations that sending beef on the hoof to the US for processing was more cost-efficient and Canadian packers and Slaughter facilities dwindled to a few large corporations. The largest being US-owned Tyson and Cargill who control about 75% of US and Canadian beef production.

Meat processing has become more or less continentalized. Many eastern canadian consumers and fast food outlets were using US beef while canadian ranchers were in crisis. Politicians and other public figures like Alberta's Ralph Klein (who's never seen a corporation he didn't like)urged the populace to support the ranchers and Canadians rallied to their beef producers. Unlike other countries who had a BSE crisis, consumption of beef was largely not affected. Prices in the supermarkets remained fairly stable. The ranchers on the other hand had excess cattle and the packers made out like bandits, buying low and selling high. An auditor-general report, forced out of the corporate-friendly Alberta government showed their profits burgeoning almost 300%. They made $79 a head before to $219 after BSE. To add insult to injury they also received massive government financial aid since they own extensive cattle herds.

Meanwhile farmers have been forced into specialized crops and production, and their one-time independence from market vagaries by mixed farming has been compromised. This also means that their self-sufficiency has become a memory and they have neither the home garden, the dairy-cow, chickens, nor other food production to take them thru difficult times.

Their frustration has resulted in an increasing number of suicides and family breakdowns.
A recent study found most family farmers earning a negative farm income, which could only be augumented by outside labor.

Just casualties of progress and a changing world ?

NO !!

These were deliberate policies initiated by all levels of government in the 60's and continued to this day by governments of all stripes. Policies of "efficiency" promoted by large corporations with their own agenda. Their victory will leave a bleary landscape interrupted only by an occasional urban center.

This has, like most macro-economists dreams, proven to be a hell visited upon local economies. Profit and Loss doesn't include the quality of life inflicted by their one-sided accounting, nor the social costs attendant upon them.

A mythology about the benefits of scale has infused agriculture since the sixties.
Mindlessly transferring the efficiency of mass-production to farming practices, economists and their corporate mentors convinced the various levels of government to acquiess to the dismantling of the family farm economy causing devastation to rural communities though-out North America. Canada followed suit and a blind eye was turned to the plight of the small farmer. Various methods were put in place to mitigate the effects but the overall policies were codified by the 1969 "Federal Task Force on Agriculture report, Canadian Agriculture in the Seventies" and all political parties accepted the wisdom of this new reality.
It propounded a 2/3 reduction of farmers and a move to mass agricultural production.

Like video lottery machines, mass agriculture was the solution to provincial short-falls. The farmers would adjust or leave the land and eventually a new balance would emerge. We are now seeing the effects of this misguided policy as evidenced in the "crisis in agriculture".

It has only grown worse since then and western Canada is filled with dead or dying towns where real estate values have plummetted or evaporated, and in the villages that still survive the population is aged and dying. The children that remain can only impatiently wait to be of age to depart to the cities where they join the ranks of the urban poor. They express their rage and boredom with vandalism and ape the urban dress and customs of what they see on TV.

"Yo", "bro", and "ho" as well as wearing backward caps and baggy pants are part of their culture. It would be amusing if it wasn't so sad and so self-destuctive as they graduate from "booze" to "crack", to show how "cool" they are, like their urban counter-parts.

Meanwhile distress help lines are set up in most communities to deal with the mounting pressure on farm families. Suicide, marriage breakdowns, and child delinquency problems are endemic in the heartland. Seemingly prosperous farmyards hide a massive debt-load and declining income. A recent report shows farmers in a negative-income return situation. But the agricultural mega-corporations are making out like bandits. The move to privatization and the "new agriculture", dovetailed with the increasing mergers in the corporate world, has been very profitable to a few wealthy investors and corporations.

While drought and the BSE crisis have had an major impact, the problems go much deeper than that. Even without these setbacks most small to medium-sized farmers would still be struggling. As one local farmer expressed it "Even if you get more land you still can't make a decent living." Most survive by having a secondary job or business to cover the negative income part of farm life.

At one time farmers were an example in self-sufficiency. They grew different crops according to demand, they had fall-backs and supplied their own needs and sold the surplus products, from dairy to poultry; beef, pork and sheep; hay and feedgrains. But the demands and government regulations of modern farming have changed all that. Now they specialize, and most buy their milk and eggs at the nearest supermarket as well as most all the other foodstuff they used to grow or rear themselves. One of the largest dairy-farms in Manitoba is just 17 km away but the milk sold in my town is supplied by Parmalait and Dairyland, and shipped here from 200 km away. Poultry is twice the price it is in major cities. Beef can only be obtained reasonably if you buy bootlegged cattle. Quotas and packing regulations rule. 80% of pork production in Manitoba and Saskatchewan is controlled by the McCains subsiduary Maple Leaf Foods. Corn in my local store 'on sale" was shipped from Ste Catherines, Ontario. Vegetable prices are double or more that of the city.

The National Farmers Union is an organization which supports family farms and sustainable agriculture. They produced a recent study showing the fallacy of the big is better myth and also the static prices paid to farmers as compared to the return to the food conglomerates.

While farmers retained (in net income) about one dollar out of every two that they generated in the late 1940s, today farmers retain just one dollar in ten. While new technologies and inputs have helped farmers increase production by about $18 billion (from about $17 billion in the 1940s to about $35 billion today), the corporations that sold those inputs and technologies to farmers swallowed up not only the entire $18 billion in increased production revenue, but an additional $8 billion as well driving farmers’ net income down. Farmers increased their output and gross revenue, but input and technology makers captured 144% of that additional revenue. Over the past fifty years, for every dollar that new technologies and inputs have contributed to farmers’ revenues, farmers have been made to pay $1.44.

There is a apocolyptic war going on. I'm not talking of the aggressive war on mid-eastern people to control oil reserves nor the actions to maintain US hegemony over latin america. It is not centered in any area like traditional wars. It is a war for global control of the very basic lifestock of our existence. Our foods. The main protagonists are USA/Euro supported multi-national corporations, and traditional family farms.

It is usually characterized by the macro-economists as resistance to "better" farming practices. Irrational resistance to the productive "bottom line".

The problem is that the bottom line in finance has little
revelance to the "bottom line" in human social relations
and existence. It ignores culture, conditions of living, and
the very existence of societies and human life. It ignores
the penalties suffered by the very people it is a subset of.

I need not invoke the many farmers in areas of India who were forced to use Monsanto products after thousands of years of traditional farmimg only to find they could not afford all the cojunct chemicals needed. When they lost their family properties, over 300 committed suicide in protest in one district and the shame of losing the family lands. And now international corporations are also patenting seeds that peasants took 1000s of years to produce.

The shameful effects of the policies of Nestles and other neoliberal supported corporations are bankrupting 3rd world countries and driving their people into desperate poverty. The policies of the WTO, IMF, and other neo-liberal organisations policing agricultural policy in the third world ignore the heavily subsidised agricultural policies of the main powers. This puts the 3rd world at a disadvantage in competing for market.

So what has that to do with us? Why should I worry about what is happening in the 3rd world?

Because it is happening here and the "bottom line" is that you are going to be held ransom to massive corporate food-suppliers like ADM, Cargill, Tyson, the canadian potato megalith McCains (who own Maple Leaf Packers, the primary pork suppliers in Canada) and others that control all your foodstuff and determine the prices that you pay in your markets. They are closely allied to Monsanto and other corporations that control the seedstock , "enhance" our foods, and sell the final product to us. A monopoly of our foodstuff and their prices will have a greater effect on our lives than housing costs, mininum wage, or health-care.

The incidence of the increase of cancer, which is overwhelming if one looks at the statistics and which has been linked irrefutably to food additives and chemically-enhanced products, is part of this, but if one looks seriously at the influence and control of the "bottom line" multinational food corporations it is enough to make an ordinary paranoid catatonic.

Virtually all your cooking oil is controlled by agribusiness. That means that whether you use the "healthful" non-saturated oils like corn, soya, or canola, they are grown from genetically-patented seeds from the major suppliers like Cargill and Monsanto. Control of virtually all our food, from meat and fish, to fruit and vegetables, and grains and flour is in the hands of a rapidly diminishing, through mergers, corporate few.

Coupled with the corporate-friendly policies of the Bush administration you are a target for world-wide control even if EU anti-gm seed initiatives should escape US sanctions. All large western nations have instituted neo-liberal policies.

Factory farming is bad for your health. That hasn't escaped the conjecture of most thinking persons. Just like humans, too many animals in congested areas contribute to easier transferrence of disease. Like the rapid infection of vast numbers of chickens in the Fraser Valley crowded into enclosed areas, or the effect of disease on salmon farms and the transfer to wild stocks, not to mention the feed cannibalism causing BSE infected beefstocks.

Pig-farms have sparked many fights over thier pollution of local water resources and the unsustainability of the practice, so that the multi-national producers now have problems finding areas which will accept them. Not so in Canada, where the Manitoba government welcomed a huge pork-producing operation in the Brandon area, claiming that the plant would be a plus for the community in jobs and economic fall-out. When the plant had problems retaining workers due to low pay and oppressive working conditions, they received permission to import workers from latin america, holding forth citizenship status for those workers who stayed on the job a certain length of time. A released worker would be deported. No unions there. An old form of slavery. The city council of Brandon, Manitoba lauded the development and welcomed the latinos as contributers to the local economy and a tribute to multi-culturalism.

All of this has an effect on our country. All of this has an
effect on our health. The urban dweller can no longer
ignore the crucial issues which will determine much
more than the lack of daycare, gender rights, equal
housing, or racism.
We are in a fight for survival against the rapacious
conglomerates who want to control the very source of
our being, what we eat and drink.

Our food, our water, the very air we breathe, are under
attack, and we no longer have the luxury of being
disengaged if we care about our children, our families,
our country, our world.

A Chomski, Suzuki, Nader, Sting, or Bono can not save
our ass without a massive entry of ourselves into the
social equation.

Or we could simply "be cool" and watch reality shows
or film clips as it all winds down.

Some links:

John Ikerd

Stop the Hogs

Beyond Factory Farming

New Farm

Needed; A Rural Strategy

The Meatrix

I strongly recommend :
Studs Turkel the great American social commentator who wrote movingly in 1988 about the plight of the farmer in his book "the Great Divide" . He chronicled the hardships and betrayals that had befallen the "heartland of America" and the people who remained. It has only grown worse.

This article was published in Montreal Serai