Download Marketing systems and cooperatives The role of the farmer

Marketing systems and cooperatives
The role of the farmer in the value chain
European Union – North America Farm Meeting
Niagara Falls, ON
October 20, 2009
Outline
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Collective marketing and cooperatives in Western Canada
What is the Canadian Wheat Board?
Benefits of an orderly marketing approach
A history of trade challenges
State Trading Enterprises at the WTO / December 2008
modalities
What the future holds
Collective marketing and cooperatives in
Western Canada
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A movement going back to the pools in the early 1900’s
Its popularity spread to many agricultural sectors in the
60’s and 70’s
Marketing boards in the hog, dairy, poultry, horticultural
industries resulted
Purpose: to counteract the power that buyers held over
individual primary producers because of:
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The perishable nature of food products
The small number of buyers
Producers’ need for cash flow
Seasonal variation in production
What is the CWB?
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The only remaining collective
marketing instrument for Prairie
grain farmers.
The exclusive marketing agent for
western Canadian wheat and
barley, both in the export and
human consumption markets
It exists to achieve the best possible
returns for the total volume of grain
that producers commit to the CWB’s
marketing program
Three pillars:
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The single desk
Pooling
Government guarantees
What is the CWB?
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It is not:
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It is:
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A marketing board
A crown corporation
A private grain company or
margin trader
A cooperative
A single desk selling agent
A shared governance
corporation
Accountable to farmers
Accountable to Parliament
through the Minister
responsible for the CWB
Advantages of collective marketing
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Increased negotiating clout with customers and suppliers
Ability to manage an effective pool
Ability to capture the full benefits of market development
activities
Enhanced ability to service discriminating markets year-in,
year-out
Size, volume, resources to effectively lobby on producers’
behalf
There is strength in numbers.
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A history of trade challenges
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International competitors feel that
the CWB provides an unfair
advantage to the Canadian grain
industry.
In the past 20 years, 14 separate
trade challenges have targeted the
CWB
All initiated by the U.S.
Challenges have been brought
before both domestic and
international trade tribunals
All tribunals have eventually ruled in
Canada’s favour.
The CWB does not distort trade.
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State Trading Enterprises at the WTO talks
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In light of the lack of success in
getting rid of the CWB under
existing rules, focus has shifted
to changing the rules.
December 2008 modalities
target the CWB.
If accepted, they would
eliminate the CWB’s monopoly
powers by 2013.
The modalities would not apply
to any other STE (specific
exemption for Zespri).
There are no real benefits for
Canadian grain producers in the
current modalities.
STEs at the WTO talks
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The federal government has already given up the
guarantees on CWB borrowings and payments (July 2004).
Overall, the deal currently on the table is not beneficial for
western Canadian grain producers.
The federal government has said publicly that it opposes
elimination of the CWB’s monopoly powers in the Doha
Round of WTO talks.
It needs to back its public commitments with the same
strong actions it has undertaken on behalf of the supply
managed sectors.
What the future holds
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International competitors are
unlikely to stop working to
eliminate the CWB.
Consolidation in the grain
industry is also likely to
continue, making the need for
cooperation and orderly
marketing more acute.
These forces are difficult to
reconcile and will probably lead
to further trade action.
Clear rules and forceful defence
of farmers’ rights are needed
now and in the future.
The future of collective marketing of
agricultural products should be for
producers to decide. It should not be in the
hands of forces that stand to gain from its
elimination.
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