Canada: Scandal over CWB growing – less than 9% world barley exports controlled by the board
The Manitoba Vice President of the Western Canadian Wheat Growers says he was shocked by the figures shown in the report on the Canadian Wheat Board released by Informa Economics, Pembinavalley reported on August 8.
Rolf Penner says the report discusses the amount of market power the Wheat Board exhibits in 91 of the countries it exports to.
The multi-year study commissioned by the Alberta government estimates an open market would improve prairie farm returns by over $20.00 per tonne on wheat, over $13.00 per tonne on feed barley, and over $25.00 on malting barley.
The Canadian Wheat Board (CWB) has long justified its monopoly over the Western Canadian wheat and barley trade by insisting that, on their own, farmers could never exert the kind of influence over international grain markets that the board does. They could never get for themselves the kind of prices the board can negotiate for them collectively.
The research shows, though, that the board's central argument is based on what could charitably be called exaggerations.
The highly respected agricultural analysis firm Informa Economics found out that the board controls less than 9% of world barley exports.
Most experts suggest that control of at least 25% of a given market is needed to exert the kind of influence on prices the CWB routinely boasts about.
Data show that only in durum wheat and malting barley Canada does have a dominant enough position in international export markets to exert influence over price, and that is largely because there is not a huge international market in either. Most countries are self-sufficient.
In barley, only in four countries do our exports exceed the requisite 25% threshold, researchers assert. But in none of these are imports a large part of the total barley supply. In the United States, for example, Canadian barley makes up less than 4% the total supply. No one south of the border is going to be intimidated by Canada’s contribution.
12 August, 2008
