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
Tuesday, January 27, 2009
Sunday, January 25, 2009
Banish the Idea of Unfettered Capitalism
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
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
Wednesday, January 14, 2009
Seed Industry Wants Taxpayers to Fund Certified Seed
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
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
Tuesday, January 06, 2009
Governments Need to Decide on Livestock Support
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
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
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
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
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
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
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
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
Friday, November 28, 2008
Viterra's Marketing Fellow Criticizes CWB
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
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
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
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
Saturday, November 15, 2008
Support Our Food Providers
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
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
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
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
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
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
Tuesday, November 04, 2008
Lies Someone Told Me
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
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
Friday, October 31, 2008
Greenspan was "Partially Wrong"
Column #692 October 26/08
It was heartwarming, last week, to see Alan Greenspan, the former head
of the Federal Reserve in the United States, admitting he was wrong.
The Federal Reserve is the American equivalent of the Bank of Canada.
Greenspan was its master through four American presidents, over a span
of 19 years. The trademark of Greenspan's tenure was his unflinching
belief that free markets, and the freer the better, would ensure the
U.S.'s fiscal health and world dominance in things financial.
Not that Greenspan didn't believe in regulation. He did, but his
version was called self-regulation. He believed that the financial
industry was capable of self-regulating since it would never do
anything that would adversely affect shareholder and company value.
The banks were full of wise people, like him, who would know when to
say giddyup and when to say whoa.
Unfortunately it turned out that the banks were full of greedy people,
not wise ones, who took massive risks with other people's money so
they could enrich themselves. And Alan Greenspan, the
once-unassailable demi-god whose decisions affected the lives of
hundreds of millions of people now is in a "state of shocked
disbelief" as he told the U.S. Congress.
Thanks Al. I'm sure all the newly-homeless in the U.S. can take that
one to the bank. And they, of course, are only a fraction of the
people across the globe in rich and poor nations whose lives are being
shattered by the collapse of markets, which began with the financial
meltdown.
Sometimes it astonishes me, how yesterday's hero can become today's
goat, and yesterday's brilliant idea can become today's laughingstock.
Greenspan's brilliant idea was to allow the banking sector to do
anything it pleased. Unfortunately, no one is laughing today, and
conservatives in the U.S. who decried the idea of restraining markets
are now nationalizing banks and screaming for rules to be put in
place. It would be hilarious if it weren't so tragic.
It bears a striking resemblance to the brilliant idea in Canada that
food manufacturing companies, like Maple Leaf, would be amply able to
regulate themselves, while government inspectors were relegated to
inspecting the reports turned out by the companies. Unlike Greenspan's
wholehearted confession that he may have been "partially wrong",
Canada's food regulators have neither accepted responsibility not
indicated they would make any changes. Can we look forward to the day
when enough people have died that the government decides cutting
inspectors and kicking them to the back rooms was at least "partially
wrong"?
Similarly, Stephen Harper is telling farmers his brilliant idea - that
they can have an open market and a strong Canadian Wheat Board at the
same time. The nonsense of the strong CWB as a grain company with no
assets, relying on its competitors to handle its grain is apparently
lost on him.
So when the dust has all settled, and when Steve finally gets his way,
and when the CWB is gone and the producer car loading facilities that
rely on the CWB are gone, and when the short line railways that rely
on the producer car loading facilities are gone, and when farmers'
investments in these are gone, who will finally do the Greenspan-like
thing and admit that they may have been "partially wrong"?
Not, I think, Mr. Harper. Farmers, like homeless ex-homeowners, will
wear the results of our blind faith in the markets. And by then, it
will be far too late for any good to come from admitting they may have
been partially wrong.
© Paul Beingessner beingessner@sasktel.net
It was heartwarming, last week, to see Alan Greenspan, the former head
of the Federal Reserve in the United States, admitting he was wrong.
The Federal Reserve is the American equivalent of the Bank of Canada.
Greenspan was its master through four American presidents, over a span
of 19 years. The trademark of Greenspan's tenure was his unflinching
belief that free markets, and the freer the better, would ensure the
U.S.'s fiscal health and world dominance in things financial.
Not that Greenspan didn't believe in regulation. He did, but his
version was called self-regulation. He believed that the financial
industry was capable of self-regulating since it would never do
anything that would adversely affect shareholder and company value.
The banks were full of wise people, like him, who would know when to
say giddyup and when to say whoa.
Unfortunately it turned out that the banks were full of greedy people,
not wise ones, who took massive risks with other people's money so
they could enrich themselves. And Alan Greenspan, the
once-unassailable demi-god whose decisions affected the lives of
hundreds of millions of people now is in a "state of shocked
disbelief" as he told the U.S. Congress.
Thanks Al. I'm sure all the newly-homeless in the U.S. can take that
one to the bank. And they, of course, are only a fraction of the
people across the globe in rich and poor nations whose lives are being
shattered by the collapse of markets, which began with the financial
meltdown.
Sometimes it astonishes me, how yesterday's hero can become today's
goat, and yesterday's brilliant idea can become today's laughingstock.
Greenspan's brilliant idea was to allow the banking sector to do
anything it pleased. Unfortunately, no one is laughing today, and
conservatives in the U.S. who decried the idea of restraining markets
are now nationalizing banks and screaming for rules to be put in
place. It would be hilarious if it weren't so tragic.
It bears a striking resemblance to the brilliant idea in Canada that
food manufacturing companies, like Maple Leaf, would be amply able to
regulate themselves, while government inspectors were relegated to
inspecting the reports turned out by the companies. Unlike Greenspan's
wholehearted confession that he may have been "partially wrong",
Canada's food regulators have neither accepted responsibility not
indicated they would make any changes. Can we look forward to the day
when enough people have died that the government decides cutting
inspectors and kicking them to the back rooms was at least "partially
wrong"?
Similarly, Stephen Harper is telling farmers his brilliant idea - that
they can have an open market and a strong Canadian Wheat Board at the
same time. The nonsense of the strong CWB as a grain company with no
assets, relying on its competitors to handle its grain is apparently
lost on him.
So when the dust has all settled, and when Steve finally gets his way,
and when the CWB is gone and the producer car loading facilities that
rely on the CWB are gone, and when the short line railways that rely
on the producer car loading facilities are gone, and when farmers'
investments in these are gone, who will finally do the Greenspan-like
thing and admit that they may have been "partially wrong"?
Not, I think, Mr. Harper. Farmers, like homeless ex-homeowners, will
wear the results of our blind faith in the markets. And by then, it
will be far too late for any good to come from admitting they may have
been partially wrong.
© Paul Beingessner beingessner@sasktel.net
Begging
October 21, 2008
Dear friends,
I have a tough time with a letter like this. Beingessners are so
miserably self-sufficient and independent we hate to ask for help from
anyone. But, desperate times demand desperate measures, I guess, so I
will swallow my pride.
I am running in the current Canadian Wheat Board director election.
The CWB is governed by a 15 person board of directors. Five are
appointed by the government and ten elected by farmers. The
Conservative government has appointed directors who want to get rid of
the CWB's single desk for selling wheat and barley. This move will
effectively end the CWB as an effective tool for farmers. Without the
single desk, the CWB becomes an insignificant grain broker, with no
assets, and dependent on its competitors to give it terminal space.
Farmers have always voted overwhelmingly for directors who support the
CWB. Currently, eight out of ten are strong supporters. That also
means that the anti-CWB side only needs to win one more position,
because of the five government appointees to have a majority on the
board. It is important to know that of the five districts involved in
elections, only two have pro-CWB incumbents. In the other three
districts, the incumbents were not able to run for another term due to
the limits set in the CWB act. Hence, the CWB is at increased risk. We
can't afford to lose any of these.
My district is represented by Rod Flaman from Edenwold. Rod has
supported the CWB and has been a good director. So why am I running?
Several reasons:
a.. Rod recently ran for the Liberals in the federal election. This
may have hurt his chances for re-election to the CWB. We need strong
candidates in case he is not electable. b.. Since the ballot is
preferential, having multiple candidates who support the single desk
will increase the voter turnout and increase the chances of pro-CWB
candidates. c.. Ian McCreary is no longer eligible to run in
district 6. Ian was the board's expert in transportation. I have
been encouraged by people who feel my expertise in this area would
be important to the board.
So, now to the tough part. Running a campaign costs money. Individual
candidates are allowed to spend $15,000 according to CWB election
rules. I know that some of you have been involved in other recent
election campaigns, and I sure don't expect you to contribute to mine
as well. Others on this list are not involved in agriculture, and may
not see much point in being involved in this election. But for the
rest of you, if you are able, and if the CWB matters to you, your
support would be much appreciated.
Contributions can be mailed to Paul Beingessner, Box 74 Truax,
Saskatchewan. S0H 4A0
Cheques should be made out to "Paul Beingessner CWB Election".
Many thanks,
Paul
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
Monday, October 20, 2008
Bush League Elections
Column # 691 20/10/08
The scene at my local polling station in last week's federal election
would have been comical if it hadn't been so serious. In this rural
area, where everyone knows everyone else, voting is usually a pretty
casual affair. You go in, wave at everyone, get you ballot while the
scrutineers and poll clerks mark your name off the list, and vote. You
wave again and leave.
This time, on my way in, I stopped to chat with a 90-year old lady who
had spent all of her 9 decades in the community. She was on her way
out, because she had forgotten her photo i.d., and wasn't allowed to
vote, until she tottered back home to get it.
When I approached the table where the Returning Officer sat, we
greeted each other by name and made small talk for a few seconds. Then
she asked to see my driver's license, complete with photo, telling me
she had to see both sides, to ensure it was current. I handed it over,
laughed, did my civic duty and left. But I left with a funny feeling.
Yes, there was something ludicrous about having to show photo i.d. to
people I've known all my life. And I wondered how this foolishness
came about. I've lived long enough to know nothing in politics is by
accident.
A day or two after the election, stories began to leak out about
people unable to vote because they didn't have photo i.d. These would
typically include the elderly, who might no longer drive, and the
poor, who don't own cars. My wife worked for a time in a remote
northern community. Only a few people there had driver's licenses.
There were no roads out!
I began to wonder why anyone would want to restrict people from
voting. Shows how naïve I am!
Voter manipulation likely reached its zenith in North American in the
2004 American presidential election. It featured Republican George W.
Bush seeking re-election to a second term against the tall,
sepulchral-looking Democrat John Kerry. Polls before the election
declared that Kerry would easily end the Bush dynasty. Exit polls,
those taken as people leave voting booths, showed a virtual landslide
for Kerry. But Bush won! While the media never got too interested in
the implications of this, Robert Kennedy Jr. did. He wrote a book
detailing how Republicans stole the election.
One of the main ways to steal an election is to disenfranchise people
likely to vote against you. The American federal election system is
rife with opportunity to do this. Rather than one body that sets the
rules and oversees the election, the voting system in the U.S. is
determined by individual states, municipalities, or cities. As a
result, the party that controls the state, city or municipality can
set its own rules for who gets to vote.
In American presidential elections, the overall vote isn't important.
What matters is who wins each state, and the votes that state has in
the Electoral College. In the 2004 election, key states showed
extensive signs of vote rigging. Areas that usually voted democrat
weren't given enough voting machines. Voters were challenged if their
address or name on the voters list failed to match their i.d. in even
the tiniest way. Some polls showed more votes cast by far than
registered voters. All these "errors" favored George Bush.
Paul Weyrich, an architect of the modern Republican Party, said in
1980 before he helped Ronald Regan win election, "I don't want
everybody to vote. Our leverage goes up . as the voting populace goes
down". Small wonder that disenfranchised voters tend to include large
numbers of Hispanics and Blacks.
It is all eerily similar to the games that Steven Harper has played
with the voters list for the CWB election. In 2006, his government
removed 16,000 names from the voters list, in "an attempt to clean it
up". The rule was that anyone who hadn't sold grain in the last 15
months wasn't entitled to vote. In some areas, crops in 2005 were very
poor. Some would have had little, if any grain to sell. 2006 brought
better crops, but many farmers hadn't sold anything by that early date
in the crop year when the voters list is set.
In 2008, Harper tried to change the act to restrict voting to those
who sold at least 120 tonnes of CWB grains in the last crop year. That
bill died on the order paper. The old rule, however, remains in place,
with a new twist. If you do not get a ballot, you can still vote if
you grew any of the six major grains, but only if the land where you
grew them is not listed on a permit book. This has created the bizarre
situation where you can vote if you grew 20 acres of flax, and had no
CWB permit book, but you couldn't vote if you grew 1,000 acres of
durum, had a permit book and hadn't sold any last year.
Equally strange, and it has always been like this, if you have
multiple permit books you can vote multiple times. A fellow I know has
six or seven permit books. He has one, his wife has one, they have one
together, the corporation has one, the son has one, etc. He likes to
have lots of delivery opportunity early in the crop year. He gets
seven votes, I get one.
Harper's shenanigans are currently the subject of a lawsuit by a group
of farmers. I am one of them. When I signed on to the lawsuit, I was
concerned about continued attempts to get around the CWB act. What I
didn't realize at the time was that the government was simply using
one of George Bush's tactics - the way to win the election is to
control who gets to vote. You simply disenfranchise people likely to
vote against you.
© Paul Beingessner beingessner@sasktel.net
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
Monday, October 13, 2008
Transportation Agency Demand Performance Benchmarks of CN
Column # 690 13/10/08
For years now, CN has been tightening the noose around the necks of
small shippers in the grain industry. In re-shaping the grain
transportation system to meet its needs, CN began with incentive rates
some years ago. These refunded a portion of the freight rate when a
grain company loaded blocks of 18, 25, 50 or 100 cars from a single
origin to a single destination. Incentive rates gave an obvious
advantage to large elevators and soon caused a major change in the
prairie landscape. Large concrete elevators sprang up on the horizon
while the small wooden sentinels were rapidly demolished.
As the system consolidated, so did incentive rates. The 18-car
incentive went quickly, followed by the 25-car rebate. This
effectively ended the day of the wooden elevator, since almost none of
these could spot and load 50 cars at a time. The 50 car incentive
declined in value and the advantage went to elevators that could load
100 cars in 24 hours, as these incentive rates increased.
Large incentive rates gave a competitive advantage to elevators that
could attain them. They provided revenue that could be passed back to
farmers in the form of trucking subsidies, thereby luring grain to
these elevators. However, smaller elevators still played on a somewhat
level playing field where car supply was concerned. And the
availability of space at an elevator is often as important in
determining where a farmer will haul as the trucking incentive that is
available.
Smaller elevators lost this advantage when CN unilaterally implemented
its car ordering system in 2000. This replaced the collaborative
approach to car allocation that had existed for decades. Under this
previous system, the grain companies, railways, CWB and farmers all
had some input into the allocation of cars on a weekly basis.
CN and CP unilaterally ended this allocation mechanism, and
implemented their own systems for distributing cars among the
competing interests that wanted them. Much of the new allocation was
done on a bid system. As a general rule, the larger the elevator, the
easier it was to obtain cars. And having a network of large elevator
made it easier than having a single one, as is the case for the
independent "inland terminals" found mainly in Saskatchewan.
CN continued its relentless march in this direction. Small shippers
found it more and more difficult to get enough cars, while large
shippers gained both from increased car supply and incentive rebates.
The most obvious shipper recourse against situations like this is to
take a complaint against the railway to the Canadian Transportation
Agency. Shippers, especially small ones, are often reluctant to do
this, since the cost is high and, more importantly, they fear
retaliation from the railway and even worse service as a result. Large
shippers like Viterra and Pioneer were relatively happy with CN's
allocation system. They have enough large terminals that they were at
an advantage in obtaining cars. Thus, when Great Northern Grain lodged
a complaint against CN's 100-car shipper program, the big grain
companies were there arguing on CN's side.
A further reason shippers are reluctant to appeal to the CTA is
because even if they win a judgement, there is no guarantee it will
result in any change in behavior on the part of the railway. Naber
Seeds of Melfort found this out the hard way. Naber filed successive
level of service complaints in 1998, 2000 and 2001. It "won" each
complaint but was out of business shortly after the final complaint.
In the first Naber complaint, the Agency ruled that CN had failed to
provide adequate service, but it refused to grant any specific relief
other than telling Naber and CN to negotiate a service agreement.
In the second case, the Agency again "ordered" CN to negotiate a
service plan with Naber but refused to be more specific than to say it
would monitor the situation.
The third ruling against CN, in 2001, was more specific. It required
certain numbers of cars to be supplied and specified some of the
conditions of service. It may have been years too late, as Naber was
soon gone.
Following Naber's complaints, there was a period of six years with no
formal level of service complaints being filed. In March 2007, Great
Northern Grain of Nampa, Alberta filed and won the aforementioned
complaint. In this ruling, the Agency was much more specific than it
had been previously, requiring delivery of certain numbers of cars on
a specific schedule.
In September 2007, the CWB and five grain companies filed level of
service complaints against CN. The final rulings on these complaints
came out September 25. While the CWB and Providence Grain were not
successful, North East Terminal, North West Terminal, Paterson Grain
and Parrish and Heimbecker were. These rulings were unique in that the
Agency set specific performance benchmarks for the railway to meet.
It is clear that the Agency has finally realized it needs to be
specific in its rulings - specific enough to actually make a
difference to shippers. Shippers should be heartened by this. Many of
them believe that CN's service has declined year after year as it
continually changes its car allocation programs to the detriment of
smaller grain companies. It appears the Agency now may be prepared to
yield the big stick it should have picked up long ago.
© Paul Beingessner beingessner@sasktel.net
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
Tuesday, October 07, 2008
Conservative Have No Platform, Farmers Don't Care
Column # 689 05/10/08
A friend mentioned to me the other day that the Liberals had promised
in their campaign platform that if elected they would conduct a
costing review of the freight rates western farmers pay to ship grain.
Since the end of the Crow benefit, freight rates have continued to be
regulated, but they have increased steadily, more than the railways'
cost to move grain. This is because each year they are adjusted to
account for increases in inflation but not reduced for railway
efficiencies. These include the vast reduction in grain shipping
points and technological improvements that have lowered railway costs.
Farm groups have asked for a recosting (the last one was done in 1992)
but the Conservatives, and the Liberals before, ignored these
requests. Estimates are that doing a costing review would save prairie
farmers about 100 million dollars a year. This is hardly chump change.
Apparently someone in Dion's campaign team has managed to convince the
party that this is a good idea. The platform also says a Liberal
government would put a halt to rail line abandonment, strengthen
safety nets and do a host of other things. It got me wondering what
the Conservative platform was promising to farmers, so I went to the
internet and booted up the Conservative party website. It was then I
found out, like other Canadians, that the Conservatives have no
platform, or at least none that they are giving out publicly. Rather,
their website focuses a lot, as has their campaign, on criticizing the
Liberal leader.
I also checked out the NDP platform. They have a section on
agriculture, though less detailed than the Liberals.
In the past, prairie farmers have voted overwhelmingly for
Conservative candidates. A recent poll cited in the Western Producer
indicated this would continue this election. I have to admit it leaves
me a bit baffled. While the Conservative government hasn't done
farmers a lot of harm yet (it hasn't managed to destroy the CWB) it
has done them very little good. Safety net programs have been changed
in name but not really improved. Money is still short for programs
like those that assist farmers to build dugouts and provide emergency
water supplies in drought affected areas. More liberalized trade,
which the Conservatives put so much stock in, died with the end of the
Doha round. Even gun control, a favorite gripe among prairie
residents, hasn't changed, despite Conservative fervor on this issue.
So with grain prices falling like a stone in the wake of the U.S.
financial crisis (soon to be the world economic crisis) what do the
Conservatives have to offer farmers? Well, if you go by their
platform, apparently nothing.
The Conservative's failure to post a platform is rooted in their
belief that Stephen Harper's sterling personality is the key to
electoral victory. Their failure to mention agriculture in the
campaign is also rooted in their conviction that prairie farmers will
elect Conservatives no matter what they do to them or how little they
do for them. Harper's attitude to farmers is, as he told those who
opposed his moves to emasculate the CWB, that those who oppose him
will be walked over.
The Progressive Conservative party once paid a lot of attention to
prairie agriculture. Changes to the transportation act, conceived
while Don Mazankowski was Transport Minister, paved the way for short
line railways. Aid to agriculture flowed freely while Maz was in
Ottawa.
Maybe farmers still remember that and have the same expectations from
today's Conservative party. The evidence to support this belief is
scant. The ideologues that run the party today have little in common
with the PC party of that time. Nor is Gerry Ritz, Saskatchewan's
contribution to the federal cabinet, on the same level as a
Mazankowski. Ritz is a bully, and not a very astute one at that. His
disappearing act (the Saskatoon Star Phoenix reported that even Harper
said he doesn't know where Ritz is) should earn the contempt of
voters. However, they will likely elect him, despite his dismal
performance.
Unfortunately, that doesn't say much for us as farmers. We could do
better.
© Paul Beingessner beingessner@sasktel.net
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
Tuesday, September 30, 2008
Election Especially Important to Farmers
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
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
Monday, September 22, 2008
Civil Servants Are Not the Minister's Flunkies
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
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
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