Mixed views Some see positives, but others fear farmers have lost their only advocate in the system
A prominent open-market supporter is warning that as many as one-third of Prairie grain farmers could be pushed out of business within five years because the ending of the CWB monopoly was pushed through too quickly.
“In my view ideology never pays bills and it never puts food on the table without a good business plan,” said Rick Swenson, a Moose Jaw farmer, former Saskatchewan Progressive Conservative cabinet minister, and one-time Western Canadian Wheat Growers Association director.
“And I don’t care if you’re a socialist or a free enterpriser, if you don’t have a good business plan you’re not going to be successful.”
A range of issues, including railway market power, grain company access to port terminals, and the viability of producer cars should have been addressed before the federal government imposed an open market, Swenson told the 19th annual Farm for Profit conference.
Swenson said elevator and freight charges are his biggest expenses, and the board was the only agency trying to rein in those costs.
“A grain producer — and I don’t care how big your air seeder is — is not going to get into that queue with any amount of commercial viability unless you are, in my view, having some way to work collectively,” said Swenson, adding farmers will have to compete with increasing potash exports for rail capacity.
He also predicted the CWB won’t survive in any form.
“Any time you have a forced ending to anything it is an ugly experience for individuals,” he said. “Good business plans never require force.”
Given more time, a “voluntary wheat board” would have evolved, but it won’t happen now unless farmers “get off our duffs” and make that happen, he said.
Swenson’s view was echoed by Swift Current farmer Stewart Wells, a former CWB director and high-profile board supporter.
He call the change one of the biggest in Western Canadian agriculture since Confederation and likened the new CWB to the 1968 horror film Rosemary’s Baby, where the devil impregnates an unsuspecting woman.
“What we’ve got here right now is (Agriculture Minister) Gerry Ritz’s baby and everybody knows that it’s problematic and it’s sort of a monster, but nobody really knows what to do with it,” said Wells.
Other speakers predicted things will work out fine.
Moose Jaw farmer Vaughn Cone said he welcomes the open market because he can forward sell crops to cover his production costs. Former Western Canadian Wheat Growers Association president Cherilyn Jolly-Nagel also supports the change, saying it will make her farm more profitable. Moreover, farmers can now put the divisive debate to bed and co-operate on other policy issues, she said.
But not everyone is at that point yet.
Farmer support for the CWB had increased since farmers were put in charge of its operations starting in 1998 and they should have been given 100-per-cent control, said former board director and Bladworth, Sask. farmer Ian McCreary.
University of Manitoba agricultural economist Brian Oleson decried board opponents who “tried to revise history” and downplay its accomplishments. University of Saskatchewan professor Gary Storey reminded the audience that the board was created to give farmers market power against railways and grain companies.
“It turns out those companies were colluding,” he said. “They were fixing the price among themselves. We’ve thrown that out and we’re back to where we were about a hundred years ago or a little longer.
“I hope things work out well, but I’m a little suspicious that history repeats itself.”
ICE futures on ice?
University of Saskatchewan agricultural economist Ken Rosaasen said the new ICE futures market for wheat, durum and barley fails to provide risk protection or price discovery because there’s so little trade.
“It’s a pretty significant no-man’s land in terms of knowing what prices are,” Rosaasen said. “People used to complain about the wheat board not having a visible price, well, I think we’re worse off now.”
Big grain companies have a vested interest in poorly functioning futures markets because it drives weaker competitors out of business, and increases their margins, while reducing farmers’.
Canadian grain companies aren’t compelled to report export grain sales, he said. There’s a risk the so-called “Great Grain Robbery,” which occurred in the U.S. in 1972, could be repeated here, Rosaasen warned.