John, a short point.
Evidence of meeting #9 for Agriculture and Agri-Food in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cwb.
Evidence of meeting #9 for Agriculture and Agri-Food in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cwb.
10:55 a.m.
Chairman, Western Grain Elevator Association
Yes, a short point. I think the idea that has been raised is a good one, but like anything it has many complex permutations and combinations as you dig down, and the committee should be aware that any time you free up one part of the market and don't free up another, you can create a problem.
I know there has been lots of talk about multinationals sitting around the table today. We're not one, and we have a flour mill in western Canada and we need to make sure that if there are going to be changes with respect to the way wheat and barley are marketed to processing plants that it be a holistic approach so that the market isn't damaged in favour of one over another.
10:55 a.m.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
In February 2006 the grain division sent a letter to our minister and it was supported by companies such as Cargill and others, in addition to your organization, asking for clarity and “recommending that the Government of Canada be prepared to discuss and negotiate the matter of exporting state trading enterprises at the WTO”.
It's no secret that the U.S. and the European Union want us to get rid of what they call state trading enterprises. In your opinion, if we were to do this, if we succumb to the pressure of the WTO and we get rid of these enterprises, right now, with 70% of the world grain trade controlled by the multinationals, will that mean that 100% of the grain trade will be controlled and then farmers such as yourself, in the long run, will wind up paying any price they want, so there won't be anybody negotiating on your behalf? That's the first question.
Secondly, is it fair to compare Ontario with Canada? Some statistics show, for example, on Ontario soft wheat, the price currently being paid is $148.88 a tonne. Under the old system the price would have been $173 a tonne. Do you agree with that? Apparently farmers are receiving less money. It's a different situation. They have access to fifteen mills and eight port facilities. They export 384,000 tonnes outside of Canada and the U.S., whereas the west exports 10.1 million tonnes. Are we really comparing oranges and oranges here?
The last question is, how many members does your organization have? Do you know how many members the National Farmers Union has? You have opposing views. They're saying that the Canadian Wheat Board has made $800 million for farmers over the last year. So we have different views. How many members do they have and how many members do you have? Who really represents the farmers in western Canada?
I'll stop there.
11 a.m.
Vice-President, Western Canadian Wheat Growers Association
The first question was on multinationals. My first question on multinationals is this. Is this a swear word? Is it such a bad thing that the multinationals are coming and buying our grain?
The Australian Wheat Board lost their export monopoly and the next day the barley price jumped. Instead of having one guy buying their grain, they had four or five companies bidding on it.
So what's wrong with having all these companies bidding for your grain?
I can give you examples of what the prices are in Montana, to what the Wheat Board's pool return outlooks are, or even their fixed price. If the Wheat Board is doing such a good job with the PRO, the PRO really has not been higher than the fixed price since it's come in, on average. It might have been a few times, but to my memory it's never been higher. So why is the fixed price--that's the market price you can get that day on the market--higher than the pooling price? It really never is.
It's not only that, it's the grading. If I take my wheat to the States I can get a much better grade for the same wheat. I'll get it graded here in Canada, I'll take those samples, and I'll go. It will be number four or five here, sometimes feed, and it's a number one in Montana. It's not necessarily dark northern spring, where you get the nice colour, but the colour isn't as important to them. Not only are you seeing maybe a 30¢ or 40¢ premium on the same grade, you're also seeing an extra dollar per bushel on the better grade. A dollar a bushel, $1.50, or even 50¢ a bushel can mean the difference between quitting farming or continuing farming, because 50¢ is huge.
11 a.m.
Executive Director, Western Canadian Wheat Growers Association
On the last two questions, I think in the case of Ontario we can look at how acreage of wheat has increased in Ontario. That's your best indicator, best barometer of whether farmers have embraced this system or not. Wheat acreage has grown. Farmers have now determined that wheat is more profitable to grow than it was before. There was record wheat acreage last fall and record exports of wheat.
In western Canada we were shut out of the U.S. market for almost three years. At the same time, Ontario wheat farmers were exporting record quantities of wheat. So it certainly worked well for Ontario farmers. They're expanding acreage, there's more processing, and there are more exports. It's very much a success story and we want to see that repeated in western Canada.
As far as the members are concerned, we have just under 1,000 members, and I do not know how many members the NFU has.
11 a.m.
Conservative
The Chair Conservative Gerry Ritz
There's a sidebar discussion here that's going to end.
Alex, you're actually out of time. Were there any other points that were missed here that someone else wanted to pick up? Okay.
Thank you so much.
We've run a little past time, ladies and gentlemen, but we did start a little bit late, too. I have several members who would like to ask one short question. Are we okay with that? All right.
Mr. Thibault, one short question, one direct answer.
June 13th, 2006 / 11:05 a.m.
Liberal
Robert Thibault Liberal West Nova, NS
I'd like to table the report of the 2006 Canadian Wheat Board annual producer survey. I think it will clear up a few of the misconceptions or difficulties there have been about the survey.
11:05 a.m.
Conservative
The Chair Conservative Gerry Ritz
Okay. If you have it translated, then I'd be happy to take it.
Thank you.
11:05 a.m.
Liberal
Robert Thibault Liberal West Nova, NS
I'll do this is as quickly as I can. The question I have is in two parts.
Mr. Vandervalk, I would tend to agree with you that you have to free up business people to do business. On the other hand, we have a system that has evolved over 60 years and seems to be working. The way it has evolved...it has changed. As we've heard in the earlier presentations, if you change it too quickly you could devastate the whole thing.
The question I would ask is if you went to a dual buying system or dual marketing system, would you have the effect or risk of high-grading to such a point that the Wheat Board would become only the repository of low-grade or low-marketability product and that would hurt or kill the people who absolutely depend on the Wheat Board?
To Mr. Heinbecker, you mentioned that there could be some changes made within the system that would be devastating to the domestic industry that has evolved through that time. You mentioned the flour milling in western Canada or other types of things. If you have time, could you elaborate on the changes you see that, if they happened, would be devastating to our domestic industry?
11:05 a.m.
Conservative
The Chair Conservative Gerry Ritz
That was actually two questions. You snuck it in and you just cost Mr. Easter one.
Gentlemen.
11:05 a.m.
Vice-President, Western Canadian Wheat Growers Association
Referring to the question on changing too rapidly and losing all that we've gained, the WCE, the Winnipeg Commodity Exchange, already has mechanisms in place for price discovery if dual marketing ever comes into play. The market is already ready for the dual marketing to come in and it will happen seamlessly. It will go into the future just like everything else. You can price off Winnipeg or Kansas, there's Minneapolis, it's all there.
Also, I don't see why... The Wheat Board has been around for 60 years. They have all these clients, they have all the networking access, everything. They have such an advantage. Why would they lose all this market share just because I'm able to sell to Cargill or Agricore or P and H, as we call it, directly? Why would they necessarily lose?
We've talked to many farmers, and they believe they would still want to keep part of their wheat with the Wheat Board.
11:05 a.m.
Vice-President, Western Canadian Wheat Growers Association
Well, what we advocate is that you have to choose how much wheat you put into the pool beforehand, so that they know exactly how much they have to sell, what quality and what timeframes.
In any other commodity, if you hold your canola, oats, or whatever, over a certain timeframe, the longer you hold it, the more valuable it becomes. With the Wheat Board, you can hold it, you can downgrade it and hold it for a year, yet it's worth the same amount of money as the guy who sold it a year earlier.
There's a whole bunch of disadvantages. We don't have time to get into them all, but--
11:05 a.m.
Vice-President, Western Canadian Wheat Growers Association
So I'll leave it.
11:05 a.m.
Chairman, Western Grain Elevator Association
I didn't want my comments about the domestic milling industry to be misconstrued. I'm not suggesting necessarily that a change would have a detrimental effect on the domestic milling industry. The point I was trying to get across is that the grain handling and transportation system is pretty complicated. Any time you try to tweak or change one small element of that, it has an effect all the way down the chain, right to producers.
I think in the case of the bill we were talking about earlier, or the idea, which was that producers could deliver to their own production facilities, if that production facility were say in direct competition with my production facility or somebody else's, and they had a different pricing structure or a different way to obtain the grain, it might create a competitive imbalance. So all I'm suggesting is that that's the route the government chooses to make very sure that the competitive balance remains even within Canada.
11:05 a.m.
Conservative
11:05 a.m.
Conservative
Larry Miller Conservative Bruce—Grey—Owen Sound, ON
Thank you, Mr. Chair.
Mr. Vandervalk, I was really interested in some of your comments, especially the one about democracy and the right to have the choice to sell. I think Mr. Heinbecker would agree that in Ontario the option to sell certainly hasn't made complications for his business and other similar businesses.
To make this dual marketing explainable to some other parties, if we had dairy farmers in Ontario who could work under the supply management system but they couldn't in Quebec, I think you'd have Mr. Bellavance, on behalf of his producers, knocking down the minister's door, and if you did it in P.E.I., you'd hear Mr. Easter squealing all the way from there.
Mr. Vandervalk, my hypothetical question to you is, if you were to have a vote by the wheat industry on whether to have dual marketing--and I'm certainly not proposing it--would it not be in the fairest of terms to have every wheat producer right across the country, including British Columbia and Ontario, in on that vote.
11:10 a.m.
Vice-President, Western Canadian Wheat Growers Association
Yes, everybody should have a vote. I just cannot get past the fact that you cannot have the majority impose their will on the minority. It's that simple. It doesn't matter if you have a vote. How did we advance as a society through the last hundred years if the majority just voted? I can give you a number of examples. I don't know if people think they're reasonable, but--
11:10 a.m.
Conservative