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Market Board
Frank Feng
A marketing board is an organization created by many producers to try to
market their product and increase consumption and thus prices. They most
commonly exist to help sell farm products such as milk, eggs, beef or tripe and
are funded by the farmers or processors of those crops or products. Marketing
boards often also receive funding from governments as an agricultural subsidy.
The leadership and strategies of the marketing boards are set through votes
by the farmers.
Marketing boards also sometimes act as a pool, controlling the price of farm
products by forming a legal cartel. They also fund other ventures beneficial to
their members such as research.
Marketing boards differ from industry trade groups in that their primary goal
is marketing towards consumers, not governments, but they may also lobby on
behalf of their supporters. Industry trade groups might also advertise directly to
consumers
In Canada , the typical organizations are Canadian Egg Marketing Agency
(CEMA) , Egg farmers of Canada (EFC) , Chicken Farmers of Ontario (CFO)
and Dairy Farmers of Ontario .
In Canada , there is very strict milk marketing board , which forbids the sale
of liquid milk or cream by unlicensed producers. Here is a excerpt describes to
show us how supply management works.
The Canadian Egg Marketing Agency manages supply by establishing
annually the national requirement for eggs. The national requirement is then
shared among the provinces. To ensure demand can be met, provincial boards
issue production quotas to individual producers after accounting for the
numbers of smaller producers who grow eggs without quotas.
Under this security , we can protect our egg market from those cheap
American eggs . And make our farms collapse .Although this would not ensure
the supply of eggs can meet our demand , but it can guarantee our food
security and develop the farmer’s economy . If our local egg farms can supply
enough eggs, then we don’t need to import ,even we can export some to
increase the income of the farmers .
Not only in the section of eggs , marketing board also play a very important
role in Wheat Board . The Canadian Wheat Board was re-created in 1935 the
aim of controlling grain prices, so as to benefit farmers devastated by the great
depression. During the Second World War, the authority of the Board was
expanded, and the Board was given the authority to set statutory maximums
on wheat, oats, barley, flax, and corn between December, 1941 until expiry
after the war. Membership was made compulsory for Western Canadian
farmers in 1943 via the War Measures Act, now with the purpose of aiding the
war effort. In April, 1943 the Board was also authorized to buy rapeseed and
sunflowers. In 1965, the Canadian Wheat Board Act, which had until then
subject to expiry and requiring periodic amendments by Parliament to extend
the Board’s duration, was amended without time limit, thereby creating a
permanent Board. CWB control over inter-provincial shipments of feed grains
became a public issue during the grains crisis in 1969 to 1972 and was
removed. Only non-feed wheat and barley remain controlled by the CWB.
The Canadian Wheat Board has exclusive authority over the marketing of
wheat and barley grown in Western Canada, both for the domestic and
international markets. Farmers are not free to sell their grain independently,
but must deliver it to the Canadian Wheat Board. This approach is based on
the belief that a single organization representing all of Canada’s Western grain
farmers (a ‘single desk’) will have more clout negotiating the best price for
wheat on the open market than individual farmers. Furthermore, since the
Canadian Wheat Board has a record of the type, grade, and quantity of grain
produced by each farmer, it is able to enter into contracts to deliver grain to
buyers at a specific date in the future (commonly referred to as “futures
contracts”), knowing these contracts can be fulfilled.
In order to ensure that grain is collected from individual farms, stored, and
transported to shipping terminals as efficiently as possible, the Canadian
Wheat Board is responsible for overseeing the storage, cleaning, and
transportation of the grain to points where it is shipped overseas. However, the
CWB does not own any grain elevators or railway cars. Instead, it enters into
contractual agreements with grain elevator operators, rail operators, and
shipping terminals.
When the economy is not prosperity , the Wheat board can give some
subsidy for the farmers’ excess wheat which can helps their manufacture .And
the wheat board made the price of the food , the government can ensure the
farmers can survive during the inflation .
But in 2009 , Aug 29 , the monopoly of the Canadian Wheat board was
abolished .This is caused by the wheat board’s marketing methods. The
boards aim to increase and stabilize farm income and support farmers by
giving small producers more negotiating heft when dealing with large buyers.
But the system can also lead to higher prices, according to the report by Mr.
Dumais, who is an economist and former director of publications for Quebec’s
Union des producteurs agricoles. Citing data from the International Dairy
Federation, for example, Mr. Dumais points out that the farm price of milk in
Canada is 72 cents per kilogram on average, compared to 37 cents in the U.S.
and 42 cents in the EU. But while consumers pay more, farmers must buy
quotas in order to start farming or expand their operations. Mr. Dumais argues
that the high price of those quotas means that any extra revenue afforded by
the marketing board’s monopoly does not actually trickle through.
“If you don’t have any quotas, you get in a situation where you don’t have the
benefit of the system as well,” said François Dumontier, a spokesman with the
Fédération des producteurs de lait du Québec.
But the price of quotas is keeping increase , although the wheat board
increase the income of the farmers , the farmers need to pay more to get the
quotas which means the high revenue is not going to the farmers’ pockets .
The farmers believe that freedom from monopoly would increase value
added and innovation for wheat. Industries such as specialty flour mills and
specialty pasta plants could buy directly from the farmer whenever they wished
instead of through the CWB, thereby gaining efficiency. Grain processing
industries would be more willing to locate in Canada and provide jobs here,
instead of in the U.S. As well, ‘marketing choice farmers’ mention that the
freedom to grow new grain varieties, which are higher yielding and lower in
protein, could bring more revenue to wheat producers. So the wheat board
should decrease the numbers of quotas. Sometimes we can change the
marketing method properly , it can help the rate of economy rise more rapid .
Reference
http://www.troymedia.com/2011/11/14/why-the-canadian-wheat-board-is-his
tory/
http://www.strocel.com/egg-marketing-boards/
http://en.wikipedia.org/wiki/Marketing_board
http://www.theglobeandmail.com/report-on-business/industry-news/marketi
ng/marketing-boards-failing-farmers-study-argues/article4506608/
http://www.laws-lois.justice.gc.ca/eng/regulations/SOR-79-158/page-2.html