Without the benefit of a supply management system British dairy farmers are finding themselves at the mercy of the supermarkets, according to a new report.Britain Telegraph newspaper reports that while milk prices in the supermarket have risen modestly, the price received by farmers has declined by 25 per cent in the past decade. Meanwhile supermarket profits on each litre of milk have risen tenfold.
The article adds that, last year. 979 dairy farmers in England and Wales left the industry.
http://www.ontariofarmer.com/
Saturday, January 27, 2007
Tuesday, January 16, 2007
Sunday, January 14, 2007
Dion’s 3 Pillars Don’t Stand Up to Scrutiny
In his bid to take control of the Liberal party, Stéphane Dion claimed there are three issues he would focus on: social justice, economic prosperity and environmental sustainability. The media has painted Dion as an intellectual policy wonk - but how thought out is his plan?
In Dion’s Energy and Climate Change plan, he states: “The federal government will propose to provinces and territories and support the adoption of a 10% target for ethanol in gasoline and 10% biodiesel in diesel by 2010.”
What are the impacts of using food crops to produce bio-fuels?
“From an agricultural vantage point, the automotive demand for fuel is insatiable. The grain it takes to fill a 25-gallon tank with ethanol just once will feed one person for a whole year [...]
The competition for grain between the world’s 800 million motorists who want to maintain their mobility and its 2 billion poorest people who are simply trying to survive is emerging as an epic issue. Soaring food prices could lead to urban food riots in scores of lower-income countries that rely on grain imports, such as Indonesia, Egypt, Algeria, Nigeria, and Mexico. The resulting political instability could in turn disrupt global economic progress, directly affecting all countries.”
I wonder how Dion will spin taking food from the poor to fuel his hybrid Prius as “social justice”?
In Dion’s Energy and Climate Change plan, he states: “The federal government will propose to provinces and territories and support the adoption of a 10% target for ethanol in gasoline and 10% biodiesel in diesel by 2010.”
What are the impacts of using food crops to produce bio-fuels?
“From an agricultural vantage point, the automotive demand for fuel is insatiable. The grain it takes to fill a 25-gallon tank with ethanol just once will feed one person for a whole year [...]
The competition for grain between the world’s 800 million motorists who want to maintain their mobility and its 2 billion poorest people who are simply trying to survive is emerging as an epic issue. Soaring food prices could lead to urban food riots in scores of lower-income countries that rely on grain imports, such as Indonesia, Egypt, Algeria, Nigeria, and Mexico. The resulting political instability could in turn disrupt global economic progress, directly affecting all countries.”
I wonder how Dion will spin taking food from the poor to fuel his hybrid Prius as “social justice”?
Saturday, January 13, 2007
Wednesday, January 10, 2007
Mexico faces free trade anxiety
Ontario Farmer Daily: Mexico faces free trade anxiety
Free trade with the United States is raising fresh fears among Mexico’s farmers, the Washington Post reports.
The poultry industry is the latest to sound the alarm bells over a flood of American products coming into the country when the final provisions of the pact go into effect over the next two years. It will open Mexico up to unlimited imports.
Farmers in the article say they can't compete with U.S. poultry raised on heavily subsidized corn. They say it will push many of them out of work, resulting in even more poor Mexican peasants seeking work – legally or illegally – north of the border.
That's no the way the North American Free Trade Agreement was intended to work. Theoretically it was to create more jobs and wealth in Mexico, reducing the emigration pressure. But, the article adds, that in the years following the deal much of Mexico's countryside has been overwhelmed by crops from the U.S., forcing many peasants off the land.
Free trade with the United States is raising fresh fears among Mexico’s farmers, the Washington Post reports.
The poultry industry is the latest to sound the alarm bells over a flood of American products coming into the country when the final provisions of the pact go into effect over the next two years. It will open Mexico up to unlimited imports.
Farmers in the article say they can't compete with U.S. poultry raised on heavily subsidized corn. They say it will push many of them out of work, resulting in even more poor Mexican peasants seeking work – legally or illegally – north of the border.
That's no the way the North American Free Trade Agreement was intended to work. Theoretically it was to create more jobs and wealth in Mexico, reducing the emigration pressure. But, the article adds, that in the years following the deal much of Mexico's countryside has been overwhelmed by crops from the U.S., forcing many peasants off the land.
Friday, January 5, 2007
The truth about the CWB
On one hand, some are claiming that a majority of farmers are firmly behind the single desk structure of the CWB and the Harper government’s attempt to dismantle it is “authoritarian.” On the other hand, you have hundreds of farmers (Ralph Klein among them) incensed at the CWB monopoly. It’s hard to find unbiased, objective analysis on what the CWB does for/to farmers and what eliminating its monopoly would mean. Anyone know where I could find some objective analysis?
Thursday, January 4, 2007
Article by Wendy R. Holm, P.Ag.
Dual desk code for disaster.
OPINION, Western Producer, February 9, 2006
Wendy R. Holm, P.Ag. (947 words)
Although a vocal minority will no doubt portray it as such, it would be a mistake to interpret Stephen Harper’s minority victory as a vote against the Canadian Wheat Board.
The spin doctors will, of course, tell you different. But on this point farmers should be perfectly clear: abandonment of western Canada’s single desk system for the sale of export wheat and barley – a system supported by the overwhelming majority of western farmers - would turn the clock back 100 years, spelling disaster for the economics of prairie communities.
Back in the 1920’s, before the CWB was created, Canada’s farmers were at the mercy of brokers who drove grain prices down in the fall, when farmers needed cash to pay bills, and up in the spring, when granaries were empty and farmers were studying cropping options to cover last year’s losses.
By manipulating price cycles, brokers were able to transfer profits from the pockets of farmers to the boards of the Winnipeg exchange, putting smiles on the faces of commodity investors and pushing rural communities to the brink of bankruptcy.
In response, farmers set up cooperatives. United Grain Growers and the wheat pools of Alberta, Saskatchewan and Manitoba allowed farmers to balance supply and demand, pool economic returns, and ensure price equity for all producers. The single desk selling authority of the Canadian Wheat Board, created under William Lyon MacKenzie King, gave farmers the market leverage to ensure fair prices to producers. The Crow Rate, initially intended to capture back for farming a small portion of the land benefits received by Canada’s railways, ensured grain could be economically shipped to ports for export.
The system worked well for close to 60 years.
Then, in the 1980’s, things began to change. First to go was the Crow Rate. Transportation rates that averaged 14 cents a bushel are closer to $2 a bushel today. Then came deregulation of Canada’s railways, resulting in the abandonment of rail service to hundreds of small prairie communities. Subsequent consolidation by the grain companies closed small, local elevators with three to eight car spots in favour of those with 50 to 100 car spots, shutting down more than 50 percent of prairie grain holding capacity,
As hauling distances increased, larger trucks were needed. In Saskatchewan, for example, roads rated for 22 tonnes now regularly service trucks hauling 64 tonnes and more. With the taxpayer picking up the tab for wear and tear.
Despite these structural changes, independent studies dating back to 1997 by noted agricultural economists Richard Grey, Daryl Kraft, Hartley Furtan and Andy Schmitz continue to demonstrate the success of the Canadian Wheat Board. Farmers received a greater return per tonne marketing through the CWB than they could have realized thru any other system. Yet today, long on rhetoric and short on history, Mr. Harper insists it’s time for a change.
Make no mistake: dual desk selling for export wheat and barley is simply code for breaking the pricing authority of the CWB. And the only ones who will benefit are the multinationals.
In concentrated sectors like the grain industry, a handful of powerful players dominate the market. With the ability to manipulate prices to serve their own economic interests, why should agri-food giants like Cargill, Archer Daniels Midland, ConAgra, Louis Dreyfus and others compete in the prices they pay for export wheat and barley? It’s far easier to drive down the farm price and put those profits to work competing for shareholder capital.
This is simply how oligopolies (few sellers) and oligopsonies (few buyers) work. Market dominance allows them to buy low and sell high and industry capital costs prevent would-be competitors from entering the market.\
Faced with concentrated markets pre and post farmgate, farmers are vulnerable. Globalization and trade deregulation exacerbates the problem, allowing multinationals to source cheap products from third world countries and pass otherwise prohibitive transaction costs, such as transportation, on to the buyer.
This has the effect of driving down prices paid to producers and inflating the price of feed grains. A two-desk system for export wheat would destroy the CWB because short-term predatory pricing by concentrated grain buyers would bid grain away from the wheat board, breaking the back of the system.
Without the central desk selling authority of the CWB, farmers to the north, facing higher
transportation costs, will be pitted against farmers to the south. Livestock producers will see prices for coarse feed grains escalate. Concentrated economic players will have their hands in the pockets of farmers across western Canada and farm communities will falter.
Welcome to the 1920’s. We’ve been here before. Those who fail to understand the lessons of history are bound to repeat them. Without political leaders prepared to listen to, understand and defend the economic and trade interests of Canada’s farmers, we are all sitting ducks.
In Canada, elections are lost, not won. On Jan 23, Canadians who had lost faith in the ability of the Liberals to govern presented the Conservatives a minority shot at doing it better.
Harper’s win had nothing to do with his unenlightened stand on wheat board, and it will be up to farm organizations and politicians of all stripes to defend the interests of prairie farmers should he make any moves in this direction.
Dual desk selling is code for destroying the market power of Canadian grain farmers and with it the economic future of western Canada’s farm communities. If we don’t stand for something, we’ll fall for anything. Think about it.
_________________________________________
Wendy Holm is an Agrologist, resource economist and author based in Bowen Island, BC. She can be reached at
holm@farmertofarmer.ca. The opinions expressed in this column are not necessarily those of The Western Producer.
OPINION, Western Producer, February 9, 2006
Wendy R. Holm, P.Ag. (947 words)
Although a vocal minority will no doubt portray it as such, it would be a mistake to interpret Stephen Harper’s minority victory as a vote against the Canadian Wheat Board.
The spin doctors will, of course, tell you different. But on this point farmers should be perfectly clear: abandonment of western Canada’s single desk system for the sale of export wheat and barley – a system supported by the overwhelming majority of western farmers - would turn the clock back 100 years, spelling disaster for the economics of prairie communities.
Back in the 1920’s, before the CWB was created, Canada’s farmers were at the mercy of brokers who drove grain prices down in the fall, when farmers needed cash to pay bills, and up in the spring, when granaries were empty and farmers were studying cropping options to cover last year’s losses.
By manipulating price cycles, brokers were able to transfer profits from the pockets of farmers to the boards of the Winnipeg exchange, putting smiles on the faces of commodity investors and pushing rural communities to the brink of bankruptcy.
In response, farmers set up cooperatives. United Grain Growers and the wheat pools of Alberta, Saskatchewan and Manitoba allowed farmers to balance supply and demand, pool economic returns, and ensure price equity for all producers. The single desk selling authority of the Canadian Wheat Board, created under William Lyon MacKenzie King, gave farmers the market leverage to ensure fair prices to producers. The Crow Rate, initially intended to capture back for farming a small portion of the land benefits received by Canada’s railways, ensured grain could be economically shipped to ports for export.
The system worked well for close to 60 years.
Then, in the 1980’s, things began to change. First to go was the Crow Rate. Transportation rates that averaged 14 cents a bushel are closer to $2 a bushel today. Then came deregulation of Canada’s railways, resulting in the abandonment of rail service to hundreds of small prairie communities. Subsequent consolidation by the grain companies closed small, local elevators with three to eight car spots in favour of those with 50 to 100 car spots, shutting down more than 50 percent of prairie grain holding capacity,
As hauling distances increased, larger trucks were needed. In Saskatchewan, for example, roads rated for 22 tonnes now regularly service trucks hauling 64 tonnes and more. With the taxpayer picking up the tab for wear and tear.
Despite these structural changes, independent studies dating back to 1997 by noted agricultural economists Richard Grey, Daryl Kraft, Hartley Furtan and Andy Schmitz continue to demonstrate the success of the Canadian Wheat Board. Farmers received a greater return per tonne marketing through the CWB than they could have realized thru any other system. Yet today, long on rhetoric and short on history, Mr. Harper insists it’s time for a change.
Make no mistake: dual desk selling for export wheat and barley is simply code for breaking the pricing authority of the CWB. And the only ones who will benefit are the multinationals.
In concentrated sectors like the grain industry, a handful of powerful players dominate the market. With the ability to manipulate prices to serve their own economic interests, why should agri-food giants like Cargill, Archer Daniels Midland, ConAgra, Louis Dreyfus and others compete in the prices they pay for export wheat and barley? It’s far easier to drive down the farm price and put those profits to work competing for shareholder capital.
This is simply how oligopolies (few sellers) and oligopsonies (few buyers) work. Market dominance allows them to buy low and sell high and industry capital costs prevent would-be competitors from entering the market.\
Faced with concentrated markets pre and post farmgate, farmers are vulnerable. Globalization and trade deregulation exacerbates the problem, allowing multinationals to source cheap products from third world countries and pass otherwise prohibitive transaction costs, such as transportation, on to the buyer.
This has the effect of driving down prices paid to producers and inflating the price of feed grains. A two-desk system for export wheat would destroy the CWB because short-term predatory pricing by concentrated grain buyers would bid grain away from the wheat board, breaking the back of the system.
Without the central desk selling authority of the CWB, farmers to the north, facing higher
transportation costs, will be pitted against farmers to the south. Livestock producers will see prices for coarse feed grains escalate. Concentrated economic players will have their hands in the pockets of farmers across western Canada and farm communities will falter.
Welcome to the 1920’s. We’ve been here before. Those who fail to understand the lessons of history are bound to repeat them. Without political leaders prepared to listen to, understand and defend the economic and trade interests of Canada’s farmers, we are all sitting ducks.
In Canada, elections are lost, not won. On Jan 23, Canadians who had lost faith in the ability of the Liberals to govern presented the Conservatives a minority shot at doing it better.
Harper’s win had nothing to do with his unenlightened stand on wheat board, and it will be up to farm organizations and politicians of all stripes to defend the interests of prairie farmers should he make any moves in this direction.
Dual desk selling is code for destroying the market power of Canadian grain farmers and with it the economic future of western Canada’s farm communities. If we don’t stand for something, we’ll fall for anything. Think about it.
_________________________________________
Wendy Holm is an Agrologist, resource economist and author based in Bowen Island, BC. She can be reached at
holm@farmertofarmer.ca. The opinions expressed in this column are not necessarily those of The Western Producer.
Wajid Khan
Accidental Deliberations has an interesting post on the possibility of Wajid Khan jumping ship to join the Conservatives.
Tuesday, January 2, 2007
LCBO privatization. Not cut and dry.
I found this report on the privatization of Alberta’s Liquor Control Board by The Fraser Institute. Surprisingly, the report found that after privatization the average price of liquor actually went up (after considering inflation and price indices). Starting on page 47, the report discusses in detail the implication privatization has had on the price of alcohol.
[Results on changes in retail liquor prices since privatization suggest that in spite of any
lower private retailer operating costs that could have been achieved by reducing labour
costs, for example, and in spite of more intense spatial competition among liquor retailers and evidence of falling wholesale liquor prices (on average), average nominal retail
liquor prices have increased since privatization.] p.51-52
However, consumers now have more choice and convenience when purchasing alcohol.
[A sample of private liquor stores from across Alberta has an average product selection that exceeds the weighted average product selection of ALCB stores. Product selection carried in the ALCB warehouse has more than doubled under privatization…As well…the number of private liquor stores is approximately triple the number of
ALCB stores.] p.68
The report is full of interesting information on the impacts of privatization including the effects on government revenue, distribution efficiency, and workers jobs and wages. The issue is complex with many unexpected implications. Despite the propaganda, the benefits and drawbacks of privatization depend largely on where your sitting, with consumers not necessarily coming out on top. This is a must read for those interested in the privatization of the LCBO.
[Results on changes in retail liquor prices since privatization suggest that in spite of any
lower private retailer operating costs that could have been achieved by reducing labour
costs, for example, and in spite of more intense spatial competition among liquor retailers and evidence of falling wholesale liquor prices (on average), average nominal retail
liquor prices have increased since privatization.] p.51-52
However, consumers now have more choice and convenience when purchasing alcohol.
[A sample of private liquor stores from across Alberta has an average product selection that exceeds the weighted average product selection of ALCB stores. Product selection carried in the ALCB warehouse has more than doubled under privatization…As well…the number of private liquor stores is approximately triple the number of
ALCB stores.] p.68
The report is full of interesting information on the impacts of privatization including the effects on government revenue, distribution efficiency, and workers jobs and wages. The issue is complex with many unexpected implications. Despite the propaganda, the benefits and drawbacks of privatization depend largely on where your sitting, with consumers not necessarily coming out on top. This is a must read for those interested in the privatization of the LCBO.
Monday, January 1, 2007
Residence of Bath need your help
Ontario’s Liberal government very quietly decided to use the people of Bath, Ontario as guinea pigs.
If you can empathize with the people of Bath, please take a few moments to express your concern to the government.
John Gerretsen, M.P.P. for the region
Queen's Park
Ministry of Municipal Affairs and Housing
777 Bay Street, 17th Floor,
Toronto ON, M7A 1A4
Telephone: 416-585-7000
Fax: 416-585-6470
jgerretsen.mpp.co@liberal.ola.org
To write to the Minister of the Environment:
The Honourable Laurel C. Broten
Minister of the Environment
12th Floor, 135 St. Clair Avenue West
Toronto, Ontario
M4V 1P5
Telephone: (416) 314-6790
Fax: (416) 314-7337
Or better yet, submit a formal letter to the Environmental Registry.
Thank you, from the residence of Bath.
If you can empathize with the people of Bath, please take a few moments to express your concern to the government.
John Gerretsen, M.P.P. for the region
Queen's Park
Ministry of Municipal Affairs and Housing
777 Bay Street, 17th Floor,
Toronto ON, M7A 1A4
Telephone: 416-585-7000
Fax: 416-585-6470
jgerretsen.mpp.co@liberal.ola.org
To write to the Minister of the Environment:
The Honourable Laurel C. Broten
Minister of the Environment
12th Floor, 135 St. Clair Avenue West
Toronto, Ontario
M4V 1P5
Telephone: (416) 314-6790
Fax: (416) 314-7337
Or better yet, submit a formal letter to the Environmental Registry.
Thank you, from the residence of Bath.
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