Farmers for economic freedom

Updates from the Canadian Farm Enterprise Network. Several of the items appearing here originally appeared in an email list operated by Dwayne Leslie at

Somebody's Wrong

By Craig Docksteader

The Aussies are making a big mistake. Or at least some people think so.

Australia is expected to introduce dual-marketing for both wheat and barley within five years. Possibly sooner. In fact, their barley export monopoly is already scheduled to go July 1, 2001, beginning in the Australian state of Victoria. The wheat export monopoly is scheduled to come under a review of their National Competition Policy in the year 2000 with the widespread expectation that it too will give way to marketing choice.

In the view of a sizable, but shrinking constituency of prairie grain growers, this should come as good news. The Australians are destroying their marketing system, endangering the viability of the family farm, and putting the future of their markets in jeopardy. As returns to Australian farmers diminish, marginal producers will go out of business and overall production will be lowered, freeing up more market share for Canada.

Unless of course, a competitive, commercial grain marketing system is a good thing.

The Aussies seem to think it is. They've been systematically charting a course towards a commercial, competitive model of grain marketing for almost ten years now.

In 1989, the Liberal government in Australia re-vamped their Wheat Act, paving the way for substantial deregulation. Alongside traditional pooling arrangements, the Australian Wheat Board (AWB) introduced a cash-trading division for wheat and other crops, where farmers could opt for the daily cash price and walk away with their money in hand.

By 1991, there was a large and growing consensus in the industry that the AWB needed even greater flexibility. They wanted to be able to respond to changes in international marketing, to enhance their competitive position and to maximize returns to growers. The plan? To come up with a marketing structure that would be fully commercially driven, and owned and controlled by the industry, rather than by government.

Recognizing that such a transition could not properly be facilitated overnight, and would require a significant base of operating capital, the Australian government moved quickly. In 1992, they designated the existing Wheat Industry Fund (financed by a 2 per cent tax on all wheat sales) as a fund which would accumulate as the future capital base for the restructured AWB. By 1999, when the AWB goes commercial, the fund will be ten years old and worth over half a billion in Australian dollars.

Instead of simply delivering their product to the AWB, Australian producers will become shareholders in the country's largest wheat marketing corporation. Called the "Grower Corporate Model", producers will control the majority of voting shares and be able to trade or sell their shares to other producers. As necessary, the AWB will be able to raise additional equity through share offerings in domestic and international financial markets.

The same thing is happening with barley marketing in Australia. Only faster. They have already deregulated their domestic feed barley market, which will be extended to malt barley July 1, 1999. At the same time the Australian Barley Board will commence operations as a fully commercial, farmer-owned corporation followed by full deregulation in July 2000 and an end to the export monopoly a year later.

In their own words, the Aussies claim that these changes will allow them "to be in a leading position as a strong player in a fiercely competitive market place". If they're right, somebody else is wrong.

If they're right, supporters of our prairie wheat-selling monopoly are wrong. If they're right, those who favour our existing over-regulated, bureaucratic grain marketing system are wrong. If they're right, those who oppose cash buying are wrong. If they're right, they have a ten-year advantage on Canadian producers.

Somebody's wrong. But don't expect the Aussies to rush over here and tell us who.

CWB Election Co-ordinator Denies Vote Count

Candidates in the Canadian Wheat Board Election have been denied their request to confirm the results of the election by a physical count of the ballots. Craig Fossay of KPMG who has been the election co-ordinator hired by the Canadian Wheat Board says that the matter is "out of his hands". Apparently after the initial computer program used to count the ballots for CWB directors produced false results two other firms were hired to supervise KPMG's handling of the affair. All of the Candidates from Districts 3, 7 and 8 have been invited on an all expense paid junket to Winnipeg to witness the recount. The candidates were asked to travel to Winnipeg and stay at the Crowne Plaza luxury hotel with all expenses for travel and accomodation paid for by the Canadian Wheat Board. Monday morning they will be addressed by various personnel from KPMG, Price Waterhouse and IBM who will assure them of the validity of the second round of winners in the Canadian Wheat Board Directors Election. The computer will then announce the winners and the candidates will be sent home.

Three of the District 8 candidates, Rod Flaman, Art Mainil, and Brian Olver, asked Craig Fossay if they could verify the computer results by a manual count of the final round. They explained that after the complicated elimination process had been taken care of by the computer the final round of ballots would be attributed to the last two candidates in a manual count similar to any other normal election. Craig Fossay said that according to an official with Price Waterhouse this would undermine the credibility of the computer program because of the potential of human error in a manual recount.

Rod Flaman won't be going to Winnipeg and states that "this does nothing to lend credibility to the Canadian Wheat Board or its Directors Elections. Flaman also said that "The invitation to go to Winnipeg to be a part of that 'dog and pony show' is an insult to prairie farmers and anyone who believes in democracy."

The press release announcin the recount:

Recount of CWB election results required

KPMG the Election Coordinator for the Canadian Wheat Board (CWB) Director Elections announced that the results of the first election of directors to the Board will be recounted because of a detected flaw in the tabulation component of a computer program.

Shortly after the official announcement of the results, KPMG became aware of errors in the results in three of the 10 electoral districts, specifically districts three, seven and eight.

"The integrity of the election process is of paramount importance to farmers, the CWB and our firm. Therefore, we are taking the necessary steps to first identify the problem, correct it, and submit the tabulation program to an independent audit review by a recognized information systems specialist. Only after the independent auditor is satisfied that the program is completely accurate will a full recount of all ballots be held. The eight independent election scrutineers will be invited to participate in this recount" said Craig Fossay of KPMG.

"We apologize for any inconvenience or uncertainty this may have caused and we are treating it with the utmost urgency. All parties will be kept informed of our progress, including the specific timeline associated with the recount" said Fossay.

WCWGA questions vote results

Farmers who want the freedom to market their own crops have scored major gains in the first Canadian Wheat Board (CWB) directors' election, but irregularities in the computer tabulation of ballots have placed the results in question, says Larry Maguire, President of the Western Canadian Wheat Growers Association (WCWGA).

The election used a preferential balloting system where candidates were gradually eliminated until someone received 50 per cent plus one of the votes. But the Wheat Growers have discovered a major blunder in the re-allocation of votes in some districts.

For example, in district eight when candidate Rod Flaman dropped off the ballot, all 1630 of his votes were assigned to candidate Terry Hanson, who was declared the winner. But, the WCWGA is aware of numerous voters who ranked Flaman first and did not rank Hanson at all.

"Essentially, the result in district eight was impossible," says Maguire, "and if we can't trust these numbers, we really don't know if any of the results of this election are credible."

He says the same situation occurred in two other districts.

Maguire is calling on Canadian Wheat Board (CWB) Minister Ralph Goodale to immediately launch an independent investigation into all aspects of the election.

"You cannot have a vote count that is approximately correct," he says. "Any other election with these kinds of irregularities would be judged invalid."

The unofficial results place three voluntary candidates on the board of directors, up from one under the former CWB Advisory Committee. Voluntary supporters placed second in five other districts.

"A large and growing percentage of farmers want a voluntary marketing system," Maguire says.

He says, "The election will be remembered as a comedy of errors with rules that favoured monopoly supporters and a disappointing voter turnout. Hopefully this will be the last CWB preferential ballot we’ll ever see."

Maguire expressed general approval for Minister Goodale's CEO and director appointments, noting that Mr. Arason brings a great deal of experience to the Board. But he stressed the Wheat Growers remain opposed to the concept of government appointments to the CWB because it diminishes the power of farmers.

Once Upon A Time...

By Craig Docksteader

In a well-lit room, with large windows overlooking the city, a number of stakeholders in the western Canadian grain handling, marketing and transportation system sit around a large cherrywood board table. Well-dressed and engrossed in their business, the participants appear to be engaged in a vigorous exchange of some significance. Briefcases, folios, coffee cups and reports litter the table, as one speaker wags his finger at another, who leans back on his chair pretending to listen.

It's a familiar scene to everyone in the room, because they've been there often. Another problem has arisen in the system and the participants are arguing vehemently about who is responsible for the mess this time.

Like the last time, the time before that, the time before that, and as far back as anyone can remember, this meeting is long on blame, finger-pointing and threats, but short on constructive solutions. An impartial observer could easily be left with the impression that the meeting is more about who's going to end up taking the rap, than fixing the problem.

The Canadian Wheat Board representative, flanked by an impressive array of legal advisors, leans forward and scribbles notes furiously on the steno pad in front of him as the balding transportation executive finishes his point. For once, he muses to himself, we're going to get these guys.

It took a long time to get this far, but the transportation corporation had already been found negligent in the performance of its duties. In the public's eye, the transportation corporation was responsible for the latest mess, and now the final details of a possible $30 million settlement were being hammered out. All that was left was to dot the I's and cross the T's and this round would be over.

It would have been nice if it hadn't taken so long and cost so much, reflected the CWB representative, but few farmers would begrudge the $2 million in CWB expenses with this kind of outcome. He could point to the potential $30 million settlement and underscore the fact that they were likely to come out $28 million ahead. Not only that, they taught the transportation goons a lesson.

That in itself was worth $2 million.

Meanwhile, the transportation executive was calming down and finishing his point. The public image of being responsible was a bitter pill to swallow, considering the way government regulation and red-tape hobbled their industry, but they'd get over it, he thought. In some ways, the $30 million payment would be a nice way to publicly lance the boil of farmer discontent over the whole issue and enable them to get on with business. How ironic, he mused, that farmers are being made to think his corporation was going to pay the bill. Where did they think that money was going to come from, anyhow?

Nobody at the table had said it, but he knew that like him, they saw it: The whole process hadn't cost the people in the room a nickel. The farmer paid for the CWB's lawyers, additional office space, travel costs, research costs, legal secretaries, accommodation, phone bills and incidentals. Ultimately, the farmer would also pay the $30 million settlement, along with all the incidental costs of his corporation, through fees charged to transport grain.

Imagine, he smirked to himself, a system where you can't lose customers and get to secretly negotiate the rates your customer will pay without the customer present. To top it off, even when you're fined for supposedly not doing your job right, you get to pass that bill on to your customers as well.

He couldn't help but chuckle. One thing about this industry, he thought, it may be hard to figure out who's responsible for problems, but it's not hard to figure out who's going to pay.

The CFEN needs your help! The battle against the Canada Wheat Board can only continue with your support.

Canadian Farm Enterprise Network
Box 521
Central Butte, Saskatchewan
S0H 0T0

Write the following and demand free market rights for Western Canadian farmers!

The Canadian Wheat Board
423 Main Street
P.O. Box 816, Stn. M.
Winnipeg, MB
R3C 2P5

Telephone: (204) 983-0239 / 1-800-ASK-4-CWB
Fax: (204) 983-3841

Email Address:

Ralph Goodale
Minister Responsible for the Canada Wheat Board
Department of Natural Resources Canada
21 - 580 Booth Street
Ottawa, ON
K1A 0E4

Telephone: (613)996-2007
Fax Number: (613)996-4516
Email Address:


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