Good morning, everyone. My name is Larry Hill. I farm near Swift Current, Saskatchewan, and I am chair of the Canadian Wheat Board's board of directors.
With me here this morning is Ian White, the president and CEO. I'll have some opening comments and then I'll give the floor over to Ian to deal with some of the operational issues we would like to address with the committee today.
First of all, I would like to thank the committee for inviting us here to speak to you. Over the past several weeks, a number of witnesses have appeared before the committee to talk about competitiveness in agriculture and how we can better compete with other players on the international stage. This morning I would like to focus my comments on competitive advantages beyond the farm gate.
As a grain producer and a business person with substantial dollars tied up in both capital and operating expenses, I want to make it clear that if I support the Canadian Wheat Board, it's not out of ideology or attachment to the past or fear that I won't be able to market my durum just as I market my pulses today. The reason I support it and have served as a member of the board of directors since 1999 is that to me a shared approach to marketing just makes good business sense. I've had the privilege of serving three terms, and if eight out of ten elected directors support maintenance of the single desk, it's pretty clear that I'm not alone. In fact, according to preliminary survey results from our most recent survey of western Canadian farmers, over 70% support the CWB.
I believe an examination of the durum industry may help to illustrate why. Western Canadian exports make up about 50% of the world trade in durum. If I can work with other durum producers and sell my grain as part of what is effectively a durum cartel, it only makes sense that we'll be able to influence the market in ways that I can't by acting on my own. This was certainly the case in the past crop year. When other sources of durum had essentially dried up in the fall and winter of 2007-08, the CWB continued to sell in what was the highest-value market anyone had ever seen.
Opponents of the single desk, some of whom have appeared before this committee, criticized the CWB in the fall of 2007 for not posting values that were as high as the spot prices that our counterparts in the U.S. were getting at the time, somewhere around $6 to $7 per bushel. Those were historically high levels, and much of the U.S. crop was in fact sold at those prices. Markets were far from peaking, however, and we ended making up sales at over three times those values and returning a price to producers of over $12 per bushel for every bushel they sold. American durum producers are amazed when they find out that this is the price we got for each and every bushel through the pool.
The advantages of the CWB go well beyond the prices we receive, however. When you have one agent handling the marketing of some 18 million to 20 million tonnes of grain, it makes a great deal more sense to undertake the kind of long-term market development and branding efforts that you need to stay competitive. When the CWB goes to Southeast Asia, for example, to show processors the benefits of using durum in the making of Asian noodles, we know as growers that any increased sales will flow back directly to us. The same applies to funds that the CWB pumps into the Canadian International Grains Institute and all the test facilities that are found there.
The CWB is also part of an integrated system that has resulted in a reputation for western Canadian wheat and barley that is second to none. As producers, I think we deserve credit for growing a high-quality crop, but it's no accident that our efforts are also backed by institutions such as the CWB, the Canadian Grain Commission, the Canadian International Grains Institute, the Western Grains Research Foundation, and the Western Grain Standards Committee. All of them play a vital role in maintaining the value proposition of a western Canadian brand. As the only supplier of a quality product, it is the CWB that gives prairie wheat and barley producers the ability to extract full value from the marketplace for this brand.
The CWB also enhances the competitiveness of prairie agriculture by standing up for producers on key issues. Where it has knowledge and expertise that no one else has—for example, on the transportation front—we have been instrumental in bringing forward a number of service complaints. We look forward to the results of the service review that Transport Canada is currently conducting.
At the same time, we continue to believe, as do many western Canadian shippers, that there is a pressing need for a full costing review of the rail revenue cap, as producers continue to pay more than they should for the service that rail companies provide.
I would like now to ask Ian to make a few comments about CWB operations. After he has spoken, I will conclude our presentation.