Sunday, August 3, 2008

CWB: Canadian gets more per bushel (for wheat) than U.S. farmers.

Canadians got more per bushel than U.S. farmers, wheat board says

Last Updated: Thursday, July 31, 2008 | 5:03 PM CT

This is from

In spite of the fact that the U.S. has fought vigorously to destroy the Canadian Wheat Board because of the advantage it gives Canadian farmers, the Harper government and many farmers are also bound and determined to destroy it as well under the banner of the freedom to market their grain as they wish. While this might on occasion bring marginally more profit to a few farmers, overall it would be disadvantegeous to them as a group. Do these farmers think that the U.S. is fighting to destroy the Wheat Board because it will make Canadian farmers better off! Here are some examples of what the U.S. has done from CWB.

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WTO dispute settlement panel ruling

In 2004, World Trade Organization (WTO) bodies dismissed U.S. complaints about the CWB, both in a dispute settlement panel ruling and again on appeal. Click here to view full decisions.

These decisions exonerated the CWB from American claims of unfair trade practice, affirming that it conducts its business on strictly commercial grounds in compliance with international trade laws. The ruling was a major victory for the CWB in the ongoing wheat trade battle launched by the United States.

The case began after a December 2002 announcement by the United States Trade Representative, as part of a four-pronged attack on the CWB, that he would seek a dispute settlement case at the WTO. In March 2003, the WTO agreed to an American request to convene a panel to hear the dispute. In April 2004, the panel released its report, in which it dismissed the U.S. charges and ruled:

  • That the CWB operates in compliance with Article 17 of the General Agreement on Tariffs and Trade (GATT).
  • That the CWB has a strong incentive to act in a strictly commercial manner, since it is controlled by farmers who are interested in maximizing their own returns and there is no day-to-day involvement by the Canadian government.

The panel stated: The Board satisfies producers by ensuring that their financial returns from the CWB's sales of wheat or barley are maximized. The mission the CWB's Board has given the CWB confirms this point: the CWB is to "market…quality products and services in order to maximize returns to western Canadian grain producers." Moreover, the CWB Act requires that, in the exercise of their responsibilities, directors and officers of the CWB "act honestly and in good faith with a view to the best interests of the [CWB]." For these reasons, we are not persuaded that the CWB has an incentive, because of its "legal structure" to make its wheat sales on the basis of considerations other than price, quality, availability, marketability etc.

The U.S. appealled this ruling and, in August 2004, the WTO Appellate Body again dismissed its claims........

Here is the CBC article:

Prairie farmers earned a record $7 billion from grain sold through the Canadian Wheat Board in 2007-08 — a 57 per cent increase over the previous year, the agency said Thursday in its annual report.

According to Larry Hill, chair of the Winnipeg-based grain marketer, the earnings worked out to more than $8.40 a bushel for high-quality spring wheat and more than $12 a bushel for high-quality durum, after freight and handling expenses are paid.

Western Canadian farmers got better prices than many U.S. farmers who sold their grain before prices spiked earlier this year, Hill said.

"This is significantly higher than what American producers received," he said. "The prices were very good in the fall and American farmers thought that $6 or $7 a bushel was a good price, so they took it."

Meanwhile, malting barley sales were the highest they have been in eight years, at 2.4 million tonnes, with farmers earning $5 a bushel.

This year, the wheat board is expecting an average crop with yields up over last year.

Prices will remain high, but they will be slightly lower than this past year, Hill said on Thursday, the final day of the crop year.

The CWB said markets have fallen over the past few weeks due to improved prospects for the U.S. winter wheat harvest and expectations of record world wheat production.

The wheat board has a monopoly on most wheat and barley sales in Canada, something that's been a subject of heated debate in farm country in recent years.

Some farmers like the status quo, but others say they could make more money if they could sell their own grain.

The federal Conservative government has vowed to give farmers more "marketing choice" when selling barley.

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