Farmers for economic freedom

Updates from the Prairie Centre/Centre for Prairie Agriculture in Regina, Saskatchewan.

web posted February 19, 2001

Who’s endangered now?

By Craig Docksteader

On February 2nd of this year, Environment Minister David Anderson followed through on his promise: He reintroduced his endangered species bill, and set the wheels in motion to push it through the Parliamentary process. After years of proposals, submissions, consultations and recommendations, it looks like Canadians are about to get another law to protect endangered species.

This will bring the total of such laws to 43. There are currently 8 federal and 34 provincial or territorial laws which contain provisions for the protection of endangered species or their habitat. The new Species at Risk Act is destined to be the crowning jewel of them all, granting sweeping powers to the federal government over provincial, private and leased federal land. At this point, I doubt anything receives more legal protection in Canada than species at risk.

Ironically, however, after seven years of consultation, the federal government has satisfied nobody. On the one hand, hard-line environmentalists are adamant that the Act doesn’t go far enough. They want endangered species and their habitat to receive automatic protection under the Act, with no flexibility for Parliament to treat an endangered fly differently than an endangered fox. On the other hand, landowners recognize that the law goes too far by threatening to regulate the use of private land and limiting compensation.

In the middle of it all is Environment Minister David Anderson. Anderson must now try and sell the law to as many people as possible, passing it off as a good compromise. He has to highlight the heavy-handed aspects to appease hardliners, while in the same breath underscoring changes that were made to alleviate the concerns of landowners.

But if Anderson thinks the changes to his Bill make it more acceptable to landowners, he’s dreaming. Consider the following:

1) Initially the law applied only to federal land. Now it applies to federal, provincial and private land.

2) Initially the law was to protect species which were endangered as a result of human activity. This has now been expanded to include "species of special concern" which means any wildlife species that might become threatened, even if the threats have nothing to do with human activity.

3) Initially the species was protected by law, but its habitat would be protected through voluntary efforts. Now landowners can face legal charges for harming either the species or its habitat.

4) Initially, penalties could reach as high as a $1,000,000 for corporations, or $250,000 plus five years in jail for individuals. In addition, the fines could be levied on top of each other for second offenses, offenses on consecutive days, offenses to different species, or offenses to more than one of the same species.

These penalties remain unchanged in the new Act. But in addition to them, persons convicted of an offense can also face a court order directing them to do the following:

- Take action to remedy the harm they caused to the species;
- Subject themselves to periodic environmental audits (paid for by the offender);
- Perform community service;
- Report to the court on their activities for three years;
- Pay for the cost of any remedial or preventative action taken as a result of the offense;
- Pay a sum of money toward research into the protection of the species harmed;
- Pay a prescribed amount of money toward an environmental scholarship fund;
- Post a bond to ensure future compliance;
- Comply with any other conditions the court considers appropriate to prevent a repeat offense.

In spite of some improvements in the tone and attitude of Minister David Anderson, these have not been reflected in the proposed legislation. In fact, it would be safe to say that the longer this process goes on, the more endangered landowners become.

web posted February 12, 2001

Dual marketing down under

By Craig Docksteader

On July 1st, Australian barley producers in the state of Victoria will have a dual market for barley. The Australian Barley Board is scheduled to lose its monopoly status in the export market and become a voluntary, farmer-owned grain marketer. For the first time in 61 years, producers in Victoria will have the choice of selling their barley through the ABB or directly to another grain marketer.

The move doesn’t come suddenly. Changes have been underway in the Australian barley industry for a number of years, beginning with a review of the ABB in 1993. That same year, the ABB’s monopoly over domestic sales was ended, giving producers a dual domestic market. Plans were then made to transition the ABB from a government-owned statutory authority to a producer-owned private company. In 1999 this transition took place, with the new ABB retaining its export monopoly.

The removal of the ABB’s single-desk status began with the deregulation of container sales of export barley. This is now being followed by the complete removal of the ABB’s export monopoly in the state of Victoria, which is the last step in this series of changes designed to give producers more control over their industry. According to World Grain publication, the changes will provide the first practical test of the benefits of single-desk selling versus deregulated export trading, and are expected to provide new impetus for the debate of the Australian Wheat Board’s export monopoly.

Not everyone is happy about the changes, though. The ABB issued a scathing two-and-a-half page press release, blasting the state government for proceeding with plans to deregulate. Members of the Victoria Farmers Federation voted unanimously to oppose the changes, and claim that more than eighty per cent of state barley growers support the monopoly.

Regardless of the opposition, however, the state government is pressing ahead. State Treasurer, John Brumby, pointed out that the government found no compelling reason for an export monopoly and that the changes mean Victorian barley growers will be free to choose whether they sell their export grain to the Barley Board or other grain traders.

"The government’s decision is about providing choices to growers so they can take advantage of changes to the domestic and export markets," Brumby said. "Grain traders can compete for Victorian growers’ business, allowing growers to shop for the best deal."

The move is also expected to encourage greater innovation and competition in grain industry related services such as financing for growers. Brumby noted that, "The general experience of domestic barley deregulation has been that greater competition stimulates investment and innovation. In recent years significant new investment in on-farm storage and handling facilities has taken place in Victoria in anticipation of barley export deregulation."

For prairie producers who are watching the developments, the direction may seem quite radical for a Labour government. But according to Brumby, it’s quite simple: "Growers should be allowed operational control of their business." In other words, government doesn’t have any business telling farmers who they must sell their barley to.

web posted February 5, 2001

Listening to the past

By Craig Docksteader

When the prairie wheat pools were first established in the 1920's, producers were buoyant. The new system held promise of being a grain handling and marketing system which would operate in the interests of farmers and iron out the troublesome wrinkles of grain farming in the early 1900's.

Many of the problems then were different than what producers face today. In the 1920's there was a lack of basic infrastructure for the grain industry; farmers were concerned about price manipulation by those who speculated in wheat on the grain exchange; there was suspicion over the fairness of weights and measures at the local elevator; and there was widespread concern that elevator operators were manipulating storage space in order to force farmers to sell at a lower grade.

At the heart of the issue, however, was the same concern which can be found today: Price. Producers were not happy with the return they were receiving for their grain.

Their solution to the problem was a grassroots one. By banding together, they would gain a measure of control over their industry, and secure a better future for their families.

When the pools went on to capture more than 50 per cent of grain deliveries over the first few years of operation, the sense of optimism climbed higher. Pool members were convinced that by riding the wave of cooperation they had discovered the meaning of market power.

Most believed that by banding together they could command a better price for their grain. They expected to counter market fluctuations by holding onto their grain when prices were low and selling only into the higher markets. By controlling a significant share of the market, they would exercise market power, increasing returns to growers. Those who wanted their grain would have to pay a fair price to get it.

But as the years ticked by, the pools found themselves unable to deliver their promise of a better way and a better tomorrow. While the cooperative nature of the pooling system appealed to many growers because it averaged returns over the year and cut the established grain companies out of the pie, it was unable to fulfill its promise of a better price.

On December 10, 1930, an editorial in the Winnipeg Free Press summed up the experience in the following words:

"It must be recognized, however bitter the realization, that we have nothing to say about the price we get for our grain... This experiment has been watched with the deepest sympathy and interest by the public generally and its failure insofar at any rate as the controlling [of] price is concerned..."

Although the intentions had been good, and some benefits had been realized by working together, the ability to increase returns to growers was not one of them. For many it was a time of dashed hopes and profound discouragement.

It is with a measure of concern that some producers see a similar scene beginning to unfold today. Although there are variations in the strategy, there are numerous attempts underway to form cooperative groups whose primary purpose is to push the price of grain up.

Like the experience of the 1920's, the intent is noble. But even though every producer on the prairies would like to see better prices, history would suggest this might not be the way to achieve it.

web posted January 29, 2001

Arbitrary exemptions

By Craig Docksteader

When a group of prairie durum growers asked for an exemption from the Canadian Wheat Board, the CWB turned them down flat. There was no way the Board was going to grant it.

Their reasons were simple: An exemption would require a change in legislation; allowing a few producers to bypass the pooling system would dilute the pool; allowing an exemption could result in producers selling into CWB markets; and lastly, it would set a dangerous precedent, encouraging other producers to insist on exemptions as well.

The producers' plans were frustrated. They could not deliver their durum directly to their pasta plant without doing a buy-back from the CWB. Forced participation in the durum pool would mean their premiums would be diluted in the pooling system, rather than being captured by the producers themselves.

When organic producers recently asked for an exemption from the Wheat Board, they got the same response. An exemption wasn't possible under the existing legislation, would undermine the pool, interfere with CWB markets, and open the floodgates for more requests. But this time the producers pointed out a number of holes in the CWB's argument.

Although the CWB denied it at first, spokespersons eventually admitted that under the existing legislation the Board could grant exemptions. In fact, not only are they able to do so, but it is a common practice at the Board. Producers outside the designated area are routinely granted exemptions; pedigreed seed producers receive exemptions; and producers of kamut, spelt and einkorn are granted exemptions.

Furthermore, under the CWB's Export Manufactured Feed Agreement, feed mills routinely receive exemptions to export thousands of tonnes of wheat and barley outside the CWB pooling system. The agreement allows exporters to bypass the CWB feed wheat and barley pools as long as the manufactured feeds contain less than 75 per cent of wheat or barley by weight.

This means that if a producer finds an export market for his feed wheat, he cannot export it without first going through the sometimes costly buy-back procedure. On the other hand, however, a feed mill can purchase the same wheat from the producer, process it, and promptly export it with no buy-back.

It would appear that the CWB's concerns over granting exemptions only apply to producers. Grain can bypass the pooling system and even be sold into CWB markets as long as it's done by "a feed mill that produces manufactured feeds registered with Agriculture Canada and subject to the regulations of the Canadian Feeds Act".

Ironically, however, unlike feed wheat and barley, the CWB doesn't even have markets for organic wheat and barley. Granting an exemption for organic grains would have no impact on CWB marketing. This means there is an even stronger case for providing an exemption for organic grains than there is for manufactured feed.

Perhaps the CWB's real concern is their last one: If producers realize the CWB can and does issue no-cost export licenses, there would be a rush of producers demanding one. On this point, they might be right.

Craig Docksteader is Coordinator with the Prairie Centre/Centre for Prairie Agriculture, Inc.

Prairie Centre/Centre for Prairie Agriculture, Inc.
#205, 1055 Park Street
Regina, SK
S4N 5H4

Phone: 306-352-3828
Fax: 306-352-5833
Web site: http://www.prairiecentre.org
Email: prairie.centre@sk.sympatico.ca


The CFEN needs your help! The battle against the Canada Wheat Board can only continue with your support.

Canadian Farm Enterprise Network
Box 521
Central Butte, Saskatchewan
S0H 0T0
CANADA

Write the following and demand free market rights for Western Canadian farmers!

The Canadian Wheat Board
423 Main Street
P.O. Box 816, Stn. M.
Winnipeg, MB
Canada
R3C 2P5

Telephone: (204) 983-0239 / 1-800-ASK-4-CWB
Fax: (204) 983-3841

Email Address: cwb@cwb.ca

Ralph Goodale
Minister Responsible for the Canada Wheat Board
Department of Natural Resources Canada
21 - 580 Booth Street
Ottawa, ON
Canada
K1A 0E4

Telephone: (613)996-2007
Fax Number: (613)996-4516
Email Address: rgoodale@NRCan.gc.ca




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