"Canadian Wheat Board Deserves Praise" - OP-ED
"You'd think when a business generates record returns and beats the pants off its competitors, the spokesman for the company's owners might have a kind word or a pat on the back for the management.
Not when it comes to the Canadian Wheat Board and its Tory government masters.
On Wednesday, the CWB reported record returns of $7.2 billion for Western farmers for their wheat, durum and barley, with wheat revenues up nearly 50 per cent and durum and barley revenues up nearly 100 per cent over the previous year.
Moreover, the CWB outperformed its international competitors and surpassed its own price targets for both wheat and durum.
"The combination of single-desk marketing and pooled pricing worked very well for farmers in last year's highly volatile international marketplace," said Larry Hill, chair of the CWB.
"Not only was the CWB able to capture high international prices, its marketing structure allowed Prairie farmers to participate in price rallies when supplies were depleted in most other exporting nations."
Hill conceded that the CWB had its challenges in 2007-08, especially with volatile, roller-coaster commodities markets and the board's producer payment options (PPO) program, in particular.
The program was introduced in 2000-01 to give producers more flexibility in pricing and to lock in prices at certain levels. With prices skyrocketing in the early part of the year, then plummeting near the end, the CWB was left with a deficit in its contingency fund amounting to $29 million.
Hill admitted that "in these extraordinary market conditions, many grain companies chose to withdraw some of their pricing options, but we believed it was important to honour our commitment to Prairie farmers by continuing to provide these programs."
In other words, despite the fact that some private grain companies pulled in their horns and withdrew from the marketplace, the CWB stuck out its neck for its producers.
Of course, the same groups that have called upon the CWB to become more market-driven and less risk adverse were the first ones to pounce on the board when it suffered hefty losses in the PPO program.
The Western Canadian Wheat Growers, a persistent foe of the CWB, said it was confounded by the "huge financial losses'' in the PPO program. "It appears as if the CWB was asleep at the switch and got caught on the wrong side of the market,'' said WCWG vice-president Rolf Penner.
Similarly, WCWG president Kevin Bender criticized the CWB for transferring funds from the producers' pooled accounts to cover the deficiency in the contingency fund. "The role of the CWB is not to arbitrarily redistribute wealth among farmers,'' Bender said.
Never one to miss an opportunity to kick the CWB in the teeth, Gerry Ritz, minister responsible for the wheat board, called the losses in the PPO program "unacceptable.''
"Western farmers have no choice but to market their grain through the board. At the very least, they need some assurance that the board is competent," Ritz said in a statement.
Not a word about the record returns for farmers, not a word about managing to produce a profit in one of the most turbulent years in recent memory in the grain markets.
So there you have it. No matter what the CWB does, it can't win with Ritz and company.
By making itself more like a "real'' (i.e., private) grain company, and offering different price options for producers, the CWB opens itself up to greater risk, as last year clearly demonstrated.
By responding to constant pressure from its foes, the CWB makes itself more vulnerable to criticism from the same quarter.
Mind you, any criticism from a representative of a government that has squandered a huge surplus and turned it into a huge deficit in less than three years should be taken with a large dose of salt."
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