The Dominion - nfu

The Canadian Wheat Board's Last Stand?

Thu, 30 Nov 2006 13:25:32 +0000

Farmers fear that proposed changes in the CWB will mean that farmers lose out and transnationals cash in

Globally, the grain industry is dominated by transnational corporations with four companies controlling more than 70 per cent of international grain market. photo: flyzipper

On October 25, Inside US Trade, an American business magazine, published a report that could have serious implications for Canadian grain farmers. The Report of Technical Task Force on Implementing Marketing Choice for Wheat and Barley was first released not to farmers or the Canadian public, but to this US journal. According to Stewart Wells, President of the National Farmers Union (NFU), that reveals something about the report's underlying aims. "That should provide some indication of whose interests are being served with this report," he said. Essentially, the report argues for eliminating the present Canadian Wheat Board (CWB) and replacing it with the so-called CWB II, a move that many argue will threaten the viability of small wheat farmers in Canada and further increase the profitability of Big Agribusiness.

The Canadian Wheat Board was established on the initiative of farmers. At the beginning of the last century, farmers felt helpless at the hands of middlemen and market speculators, observing, among other things, an inordinate difference between the price they received and the eventual selling price. In response to this situation, the pre-cursor to the CWB was established in 1917. The Canadian Wheat Board Act was passed in 1935. The CWB has existed more or less in its present state for 70 years.

Today, the CWB is collectively owned by farmers and receives financial backing from the federal government (including low interest rates and guaranteed payments). The taskforce that wrote the report proposes to scrap the current board, which is composed of 15 members elected by farmers and five government representatives, and replace it with a board appointed entirely by the federal government. The move away from a farmer-controlled board is troubling for NFU's Wells. "Buried in the platitudes is the underlying theme of absolute government control of the Canadian Wheat Board," he said The report also suggests that the Board should be re-structured to a share-capital company, with shares available for sale to any interested buyer. The CWB argues that this move will shift control of the Board away from farmers and into the hands of shareholders. According to a statement issued by the CWB on November 6, "In the share-capital model, farmers are inevitably forced into the position of being a supplier instead of an owner."

Currently, the CWB has the exclusive right to market Western Canadian wheat and barley (with the minor exception of barley grown for feed). This function, referred to as a 'single-desk,' means that one organization represents all Western Canadian barley and wheat farmers. According to the NFU, "The CWB's single-desk selling advantage enables it to extract higher prices in world markets and to price-discriminate between buyers," thus getting more money for farmers. The NFU estimates that this advantage results in annual premiums of $265 million for wheat and $72 million for barley. The taskforce's report recommends that this feature be done away with, allowing other (mainly transnational) companies to compete. Agriculture Minister Chuck Strahl, who appointed the taskforce but did not sit on it himself, is in agreement with the recommendations and endorses "freedom of choice for marketing of wheat and barley and voluntary participation in the CWB." But various critics have pointed out that the CWB cannot be both strong and voluntary.

Jan Slomp farms near Rimbey in central Alberta; she is one prairie farmer concerned about what will happen if the single-desk is abolished. According to Slomp, in an environment of so-called 'market choice,' "the CWB cannot function. It does not have elevators or terminals, like all the other grain companies do. So in order to do business it would have to use facilities that were owned by other grain companies, making it impossible to capture a price higher than the price offered by these companies." As the CWB notes in its response to the taskforce report: "In the absence of the single-desk, a 'strong and profitable CWB' is a myth. In the absence of a single-desk there is no viable alternative for the Canadian grain industry other than that which exists in the rest of the world."

Globally, the grain industry is dominated by transnational corporations with four companies controlling more than 70 per cent of international grain market. In a report published last year, the NFU notes that while corporate profits are on the increase, farmers are earning less: "…overall, Canadian farmers have not earned a single dollar of profits from the markets since 1984. Over the same period, agribusiness has accumulated profits almost certainly reaching into the trillions."

When asked who stands to benefit from proposed changes to the CWB, Slomp is brief and to the point. She names the four biggest players in the global grain trade: Cargill, Bunge, ADM (Archer Daniels Midland) and Louis Dreyfus. In its statement, the CWB warns that removing its single-desk function would have a crippling effect on Canadian farmers, while boosting the power of transnationals. Control would fall to companies whose "focus is quite naturally on the most profitable way to make the sale…[and who] are necessarily indifferent to whether the grain needed for the sale comes from Argentina, America or Ukraine."

Those who support the re-structuring of the CWB argue that the board is obsolete and not financially viable. Various economists and think tanks (such as the George Morris Centre, the Frontier Centre for Public Policy and the National Citizens Coalition) have suggested that farmers would have lower costs and higher returns if the CWB were disbanded. The NFU disagrees. After tallying the benefits provided by the CWB (including price premiums, low freight costs and efforts to prevent the introduction of GM wheat) the NFU estimates that the Board saves farmers over $800 million every year.

Despite serious opposition from farmers, Minister Strahl is pushing ahead. According to Strahl, "We have promised to implement a system of marketing choice, and we are moving in that direction." Until recently, Strahl dismissed the notion of farmer plebiscites to determine the future of the CWB, even though such votes are required by law under the Canadian Wheat Board Act. But already, the resistance of farmers has met with some success. According to Stewart Wells, while there is still no commitment to hold a wheat plebiscite, "Farmers have scored a major victory by forcing the federal government to conduct a plebiscite on barley." Much will depend on how the plebiscite is worded, however. Wells, for one, is not optimistic: "We don't have much confidence this government will run a fair vote on this plebiscite."

For Jan Slomp a future without the CWB is a grim prospect. "Many farmers have indicated to quit producing after the single-desk is gone," she said. "It does not make sense to keep trying if all the farmer market power is gone."

Anna Kirkpatrick investigates proposed changes to the CWB that farmers fear will decrease their viability and increase transnationals' profitability.

Will Eliminating Subsidies Help Poor Farmers?

Fri, 27 Oct 2006 12:53:16 +0000

The NFU's Darrin Qualman discusses how corporate control of markets goes missing in discussions of "free trade"

Cargill-owned grain elevators on Lake Erie. photo: Maureen Jameson

When discussion turns to the plight of the farmers of the world, especially in the Third World, the narrative is remarkably consistent. The story is one of rich countries--in Europe and north of the Rio Grande--that subsidize their farmers. These farmers are able to produce foodstuffs for artificially low prices, with prices driven lower still by their established scale and ability to invest in advanced technology. Poor countries, notably those in Africa and the Caribbean, are devastated when their markets are flooded with cheap rice, corn and other food products from rich countries.

WTO critic Joseph Stiglitz, CBC journalist Michael Enright, former Trade Minister Pierre Pettigrew and the Third World Network agree on the best course of action. So do the editorial boards of the Guardian, the Globe and Mail, much of the progressive press and the financial press. There is a near-consensus about the solution. To help Third World farmers, Europe, the US and Canada fulfill their part of the bargain at the WTO and remove subsidies for their farmers and reduce tariffs that deny Third World farmers access to their markets.

The only things standing in the way of prosperity for a billion poor farmers, this diverse chorus tells us, are the entrenched interests of farmers in rich countries and their hold on governments that refuse to open up their markets to foreign competition.

According to Darrin Qualman, director of research at Canada's National Farmer's Union (NFU), there's a problem: the narrative is a distraction and removing subsidies will do very little to help poor farmers.

"It's all just wrong. It's the wrong talk about the wrong topics," says Qualman. "The one thing they're not discussing at the WTO is what's causing the farm income crisis--corporate power taking out profits and impoverishing farmers."

Qualman says that one of the basic problems with the narrative is the central "mantra" that "market access" will help farmers in the majority world. A picture-perfect case study for why this is not the case can be found close by.

"Canada is probably one of the most successful countries in the world in terms of gaining market access--I can't imagine that there are many countries in the world that have been as successful at getting access."

"The net result has been the worst farm-income crisis in Canadian history."

Instead, Qualman says that all available data point to trade liberalization as being wildly enriching for those who have consolidated control over markets, but devastating to small-scale farmers. Farms are told to become more "efficient" in order to compete, while transnational agribusiness takes in huge profits by squeezing farmers and controlling distribution and retail channels.

As a general trend, Qualman says that "farm income around the world is inversely proportional to trade volumes and the number of trade agreements we sign."

"The WTO guys would say that it's directly proportional... They're just lying. All the data from the last 20 years says they're wrong."

It's not that poor farmers aren't being put out of business by subsidized crops. This, Qualman explains, is a natural side effect of putting a billion farmers into competition with each other by removing the ability of governments to regulate what enters their borders.

"Dumping shouldn't happen, but the problem isn't subsidies. You have to give poor countries the power to say no to these products." This means addressing the source of those policies: often the International Monetary Fund (IMF) and the World Bank, which use their leverage over poor countries to impose "free trade" policies.

Agribusiness has "merged and merged" at the transnational level, consolidating power and resulting in massive profits, while "the system has been altered such that all the farmers have been brought into competition with each other." Qualman says that the results are entirely predictable: "We have been put in a race to the bottom triggered by the dissolution of barriers."

Grain and oil seed farming provide the quintessential example. "Cargill [a US-based crop nutrient producer and distributor] will play canola farmers in Canada against soy farmers in Brazil, against palm oil producers in Indonesia." Because each region's farmers can be threatened with the threat of lower-priced product from their counterparts, the result is a massive power imbalance between farmers and distributors, with a predictable effect on profits: farmers are struggling to get by, while the consolidated agribusiness multinationals are showing record profits year after year.

In the abstract, Qualman agrees with the premise of the "free trade" crowd.

"Farmers would love to see the market distortions taken out, but we need to start with the highest-profit links in the chain"--the corporations deriving record profits from consolidating power over markets, not farmers in the First World, the majority world, who are losing money every year. "The WTO wants to just focus on one link."

"If they want to help farmers, we need to talk about breaking up cartels and breaking up the power of these near-monopoly agribusiness corporations."

In the end, the problem for farmers isn't about having better data or a more convincing argument to petition the government. Currently, "the government is largely hostile to the family farm and the needs of rural communities," so the problem is one of political clout. To oppose a global system that is stacked against them, farmers must organize globally.

"Farmers used to organize provincially, then they saw that the policy was made at the national level," says Qualman. "Now if you look at where policy is happening, you would say that farmers need to organize planet-wide."
This is a task of mammoth proportions, but the process has already begun, albeit slowly. The NFU is a member of Via Campesina, an international network dedicated to "uniting farmers toward common goals." Many Via Campesina members are currently dedicating their energy to fighting policies imposed by the World Bank and IMF on farmers, particularly in Asia and Latin America.

Dru Oja Jay investigates how corporate control of markets goes missing in discussions about "free trade."

"Holy Cow, Farmers Really Are Efficient"

Wed, 08 Mar 2006 18:02:13 +0000

Record corporate profits are linked to farmers' woes: NFU

"It's farmers that are most hooked in to the input corporations that are having the hardest time making a profit." photo: Dru Oja Jay

The story of farming in the last few decades is a familiar one and a sad one. Competition means lower prices, and lower prices mean that farmers have to produce more to break even, which drives prices lower yet.

This story is present everywhere farming is discussed. Official government policy says that farms must become larger and more efficient. News reports chronicle the shut down of hundreds of family farms, which are no longer viable in the global economy. In a recent editorial on stagnant productivity growth, the Globe and Mail singled out farmers for their inefficiency. Farm subsidies, the conventional wisdom says, can only soften the impact of the inevitable transition to hyper-efficient, large-scale operations and imported food.

Canada's National Farmers' Union (NFU), however, says there's a small problem with the story: it's wrong.

The NFU's director of research, Darren Qualman, says that farmers have achieved the largest increases in efficiency of any sector in the Canadian economy in the last 30 years. Farmers "can make and deliver products for 1970s prices. No one else can do that," says Qualman. Only half joking he adds that someone should challenge theGlobe and Mail editorialists to write for 1970s freelance rates.

In November of 2003, the NFU released a report entitled "The Farm Crisis, Bigger Farms, and the Myths of 'Competition' and 'Efficiency,'" which details the drive for efficiency in government policy and its effects on farm income.

A series of graphs shows that while prices for food products have increased three- and fourfold, the prices farmers get for their crops have stayed constant since the 1970s.

Farmers have made massive gains in efficiency, but have not received any financial benefits. Paradoxically, even as per-farm revenues have increased due to consolidation, farm profits today are at an all-time low. 2003 was the worst year ever for Canadian farmers, when per-farm Market Net Income was negative $16 000. Farm profits for the last 20 years, the NFU says, have been near or lower than they were during the Depression.

"Today, farmers are paying to produce," says a recent NFU report. "Were it not for taxpayer-funded support, off-farm income, depletion of savings, and access to debt, farming in Canada would have to cease."

Why do farmers remain in such dire straits?

While news coverage often dwells on the plight of farmers, it rarely looks at the overall success enjoyed by agribusiness. This is the subject of the NFU's November 2005 report, "The Farm Crisis and Corporate Profits."

The report examines the finances of 75 companies in the supply chain of food production, including meat packing, farm equipment, veterinary drug manufacturing, fertilizer, fuel, food processing, and food services . It finds that 41 companies posted record profits in 2004, which was at the same time the second worst year on record for farmers. For 76 percent of the companies examined, 2004 was one of the three best years for profits .

The NFU says there is a direct connection between corporate profits and farmers' losses.

Qualman says that the main problem is the difference in market power between farmers and the small number of corporations that control distribution. Because "a handful of companies" are buying from 250 000 farmers, they can effectively set prices as low as farmers will go, but can also raise prices for consumers. Corporations like Kellogg, Cargill, PepsiCo (which owns Quaker Oats), and Tyson Foods were among those posting record profits while farmers were posting record losses.

The dynamic is similar for suppliers of farm equipment, pesticides, seeds, veterinary drugs and fertilizer. According to the report, "Huge profits and impressive ROE [return on equity] rates are the norm at the non-farm links in the agri-food chain." Having consolidated ownership through mergers, the NFU says, corporations selling inputs and equipment are able to raise prices to account for any profits that farmers earn through increased productivity.

Qualman says there is a direct link between farmers' relationships to powerful conglomerates and their lack of profits. "It's farmers that are most hooked in to the input corporations that are having the hardest time making a profit."

Because of their relatively direct channels of distribution and lack of dependence on fertilizer, veterinary drugs and pesticides, Qualman says organic farmers "have an easier time hanging on."

The root problem, says Qualman, is that "policymakers economists and media assume that markets work... these guys are market ideologues, and their a priori assumption is that markets work."

"They say, 'If these people are earning poor incomes, maybe it's because they're inefficient."

"We just say 'No no, the markets are failing.' We've made tremendous progress. " in pushing back against the prevailing wrong assumptions, says Qualman.

"Three ministers of agriculture have been largely forced to stop talking about inefficiency." When shown the evidence, they're forced to say, in Qualman's paraphrase, "'Holy cow, farmers really are efficient!'"

Dru Oja Jay investigates what the National Farmers' Union says is a direct connection between corporate profits and farmers' losses.

Canadian News: February 25

Wed, 25 Feb 2004 20:45:03 +0000

Advocates Concerned Child Poverty Problem Not Being Properly Tackled

From an exhibition of photographs illustrating child poverty in Canada sponsored by Campaign 2000 and PhotoSensitive. photo: Dick Loek

In 1989, Canadian Parliament decided to end child poverty by the year 2000. According to Campaign 2000, a cross-Canada coalition of over 85 national and community organizations, more than one million Canadian children – 15.6 % of the child population – remained in poverty in 2001. This problem persists even though more than half of these children have parents who are in the paid labour force.

The recent Throne Speech included commitments to national child care and there was a recognition of the need for better jobs. Despite these mentions in the speech, advocates are still very concerned that the sole mention of poverty in the speech focused on "local solutions for local problems" with no federal strategy on child and family benefits. Campaign 2000 proposes an enhanced child benefit of $4,400 for all low, modest, and middle-income families.

"Investments in children cannot wait for brighter days especially when inequality in Canada continues to grow amidst prosperous times. The government's concern with not passing on any deficits to future generations rings hollow when children are going hungry and with no place to call home" said Greg deGroot Maggetti of Citizens for Public Justice, a national partner of Campaign 2000. (Citizens for Public Justice, Campaign 2000)

* * *

Graham Slammed for "Confused," "Me-too" Stance on Haiti

Canada's Foreign Affairs Minister Bill Graham came under fire for what was called Canada's "me-tooism" in its stance on violence in Haiti. "Bill Graham's recent remarks yesterday on Haiti indicates that he is depending upon US policymakers to orient Canada while not having a clue as to what is really happening there," said a statement released by the Council on Hemispheric Affairs (COHA), a Washington-based research institute.

The COHA statement claims that in suggesting that Haitian President Jean Bertrand Aristide has not lived up to obligations placed on it by the Caribbean Community Secretariat (CARICOM) and the Organization of American States, Graham is "closely aping" the US line on Haiti, which "seriously distorts reality".

COHA criticized also criticized Graham for failing to publicly recognize that Haitian opposition "has obdurately refused in any way to join in a process of reconciliation". "The root of the opposition's strategy is the need to create the very chaos that Mr. Graham somehow appears to attribute to Aristide," the COHA statement said. "There is where Mr. Graham's outrage appropriately belongs."

* * *

FNGA Scrapped, New Aboriginal Legislation Needed

The First Nations Governance Act (FNGA), introduced by former Indian Affairs Minister Robert Nault in 2002 as a replacement to the 126 year old Indian Act, was seen by many to have simply continued the rift between the government and aboriginal groups . Andy Mitchell recently took over the portfolio, and one of his first actions was to scrap the Act.

Dr. Taiaike Alfred, from University of Victoria's Indigenous Governance Program, said the Act was not based on sufficient consultation with the aboriginal community, and customs and traditions were not properly respected by it. "The government wants First Nations to be accountable -- an accountability that is familiar to people in government and business, not necessarily First Nations people," said Alfred. "It is another abandonment of what it is to be indigenous in favor of assimilation."

Dr. Frank Cassidy, a professor in UVic's public administration and political science departments, says the new Liberal government has the opportunity to effect positive change, but that any new legislation must be enabling to aboriginals, rather than be yet another set of rules. "People are alerted now, so any legislation that goes forward that is cast along the same lines as the FNGA will be the focus of some serious opposition." (The Martlet)

* * *

Drug Patent Amendments "Critically Flawed": Médecins Sans Frontières

Bill C-56 is a new piece of legislation that will amend the Canadian Patent Act, and its goal is low-cost medicines being made available to developing countries. Médecins Sans Frontières (MSF) supports changes to the Act but calls this new legislation "critically flawed," believing that the changes will ultimately impede the production and delivery of cheap generic medicines to the world's poor.

MSF offers that there are three main flaws in Bill C-56. First, the "Right of First Refusal" can allow brand-name drug companies to take over contracts originally negotiated between developing countries and generic drug companies. Second, a limited list of generic drugs will be able to be produced. And third, only countries that are members of the World Trade Organization will be able to import the drugs.

MSF believes that if these and other flaws remain unaddressed, the new legislation will be ineffective and a step backwards from Canada's international commitments. (Médecins Sans Frontières Canada)

* * *

National Farmers Union Wants Commons Debate

An emergency House of Commons debate dealing with the income crisis facing Canadian farm families is needed immediately, says the National Farmers Union (NFU). The realized net income from the markets alone, net of government subsidies, was negative $5 billion, translating into a $20,000 loss per Canadian farm in 2003, points out NFU president Stewart Wells.

Wells says that the government cannot simply blame the crisis on external factors such as the BSE crisis, drought, and a rising Canadian dollar. Rather, he says, the problems are "systemic" in nature, resulting from government policies that have been attacking primary producers.

International trade agreements and domestic deregulation policies have allowed a small number of large companies to squeeze out smaller farms, and government policies are encouraging this to happen, says Wells. "Corporate dominance of the market is the biggest long-term influence depressing farm gate prices," he explains.

Canadian News

Mon, 22 Dec 2003 22:41:48 +0000

Farms Produce More, Earn Less: Farmers' Union

Faemers say they are contantly sttaining greater efficiency, but all possible profits are taken by powerful agriculture technology corporations and declining prices from nearly-monopolized buyers.

A report released last week by the Farmer's Union of Canada says that while revenues have increased on a per farm basis, actual income is quickly approaching zero.

The report, entitled "The Farm Crisis, Bigger Farms,and the Myths of'Competition' and 'Efficiency'" says that farmers find themselves in a double bind. They must constantly invest in technology and expansion todeliver more produce for less money, but must also make do with falling prices.

Most farmers, the report says, "arestruggling with the worst farm income crisis since the 1930s."

Prices paid to farms have held steady since the 1960s, while all other prices have gone up. The price of a loaf of bread, for example, has more than tripled since 1975. By contrast, wheat prices have hardly changed during the same period.

The report finds similar trends in corn and cornflakes, barley and beer, and hogs and porkchopspork chops. In each case, the price of the processed product has more than tripled, while the commodity itself has stayed at aconstant low price.

The Farmer's Union pins these trends on elementary principles of economics. While economies of scale result in greater efficiencies, the resulting large entities hold a greater concentration of power.

This, according to the studies cited by the report, can result in higher prices despite lower costs of production. "Given the opportunity to charge less, but also the power to charge more, corporations will act predictably."

Under "free trade" deals like NAFTA, Canadian family farms must compete with each other and with farmers worldwide for a very small number of powerful buyers.

In Canada, for example, two multinationals pack the vast majority of Canadian beef. Similar concentrations exist in almost all sectors.

While multinationals consolidate control over distribution through mergers, the report argues, farmers are constantly forced to compete with more of the world.

Shortly after the report was released, Maple Leaf Foods began a takeover of Schneider's, a move that would give the corporation control over 80% of slaughter capacity in both Manitoba and Saskatchewan. Independent hog farmers say the deal will take away "even the pretext of competition".

Dru Oja Jay

National Farmers Union:

* * *

Martin Axes Housing Minister, Creates Privatization Czar

Upon taking office as Prime Minister, Paul Martin hasundertaken a radical cabinet shuffle. One of his most radical changes has been the elimination of the secretary responsible for housing. Mississauga MP Steve Mahoney, previously in charge of housing, was dropped from cabinet along with his job. Responsibility for the housing portfolio will fall to Environment Minister David Anderson, a move the Toronto Star called an "odd fit".."

Housing activists say that the change indicates a de-emphasis on affordable housing. Murray Dobbin, author of CEO for Canada, called it a cynical move, since "Martin eliminated all federal funding for social housing" while Finance Minister. The Prime Minister has said that he intends to "build a society based on equality, not privilege."

Meanwhile, Martin has created a new position: "Parliamentary Secretary to the Minister of Finance with special emphasis on Public Private Partnerships (P3s)." Covered by almost no major media outlets, the new position will be filled by John McKay, an MP from Scarborough East. Little information is available about the position, but in a news release the new "P3 Czar" named "affordable housing" and "electric power" as being among several areas that could benefit from P3 deals.

P3s involve offloading government services onto private-sector firms. P3 advocates say that the deals are necessary when governments don't have enough money to fund important projects. Opponents claim that P3s are significantly more expensive in the long term, move government funds to the private sector, and provide a short-term excuse to cut social programs. (Toronto Star, John McKay, MP)

Press Release:

Toronto Star:

* * *

BC Great-Grandmother Chooses Jail Over Promise not to Protest

Betty Krawczyk will spend Christmas in jail, declining an offer of parole in exchange for a promise not to protest anymore. The 75-year-old great grandmother was arrested while protesting the logging of numerous forests in British Columbia.

Krawczyk has previously spent a total of two years in jail for various other protests, and will likely not be released until mid-February. She is launching a Charter of Rights challenge to the fact that she was charged with criminal contempt of court, as opposed to civilecivil contempt, which carries lighter sentences.

Increasingly, those arrested en masse at demonstrations in Canada are finding they cannot get out of jail without signing away their right to protest. Some activists have been denied the right to associate with certain people in order to get out of jail; others have travel restrictions. (Canadian Press)

Canadian Press: