Inorganic Wheat Board
The Plight of Kirk Torkelson
Kirk and Ila Torkelson farm organically at Beaubier, Saskatchewan, and
like all businesses, it's challenging. In Nov. 2002, two truckloads of
Torkelson's wheat headed south for the American organic market. He needed
the sale. If Torkelson lived in Ontario, he would have been granted the
required Canadian Wheat Board (CWB) export license, but CWB policy denies
licences to Western farmers. CWB policymakers use their licensing division
to funnel grain into the CWB's Marketing Division, where it is pooled.
For Torkelson to legally cross customs, he needed to sell both loads of
his wheat to the CWB and then, be damned, buy back the same two loads of
his own wheat from the CWB, coughing up a tidy $1,430 payout to it in the
process.
The CWB legislation, itself, doesn't specify this buyback requirement for
getting a permit, but the CWB bureaucrats do. By having to sell his grain
to the CWB, Torkelson was automatically plunked into the conventional CWB
system, one which eats up Western organic farmers' profits, gives them a
price based on a formula meaningless to organic farmers, and prevents them
from competing with their Eastern counterparts on a level playing field.
Out West, organic farmers want to be added to the CWB's privileged
licensing list, which includes Eastern growers, kamut wheat growers, big
corporate feed mills, seed growers and others. Each is automatically
granted export licences, each bypasses CWB marketing and pooling, each
downloads its licensing costs on the West and each puts the cash in its
own pocket. Adding organics to the privileged list is logical because the
CWB can't even market organic grain since global organic markets require
the CWB seller to be certified organic, which it is not.
The CWB was so confident in its selling ability during the 2002 bullish
grain market that it actually predicted, in writing, that the CWB's
payment system should get Torkelson what amounted to a preliminary $8,900
payment at the end of the crop year. The CWB's communication's machine --
a $2-million farmer-funded operation -- was in full gear in every media
outlet and farmers were inundated with the likes of CWB analyst Peter
Watt, boasting, "... the wheat board is in the driver's seat in terms
of where we market the grain, when we market the grain and what price
level we market the grain."
Prices were high and grain seemed scarce as CWB elections appeared on a
sunny horizon. But the CWB pulled out of the hot market. It should have
spent more time marketing and less time going to Liberal fundraisers with
tickets paid for by farmers, because the market dived and the board ended
up selling into a falling market and swallowing a huge deficit, but not
before it took a bite out of Torkelson.
Thirteen months after his buyback, Torkelson received a second dun, or
demand for money, from the CWB for $4,630, increasing his buyback cost to
$6,060, or 30% of the gross income from his sale, with the only service
being rendered was to issue an export licence.
When his plight became public, the CWB claimed it was Torkelson's own
fault. The CWB's organic marketing specialist (who doesn't market organic
grain nor do organic farmers want her to), went after Torkelson in the
Western Producer newspaper saying: "It appears that he wasn't
following the pool return outlook and he wasn't keeping abreast of what
the market was doing. If he had done that, he would have been more
aware."
There was absolutely nothing Torkelson could have done. He had done
business according to the CWB's terms.
The CWB's actions highlight the pitfalls of dealing with this government
agency. First, you can't trust the CWB's figures and projections to
determine whether the buyback is affordable -- the second dun proved just
how bogus the CWB's own figures can be. Second, although CWB experts
stopped selling during a bullish market and although CWB profits turned so
sour that the CWB ended up begging the federal government for $ 5-million
of taxpayer's money, Torkelson -- the managing expert on his farm -- knew
enough to sell into his niche organic market when prices were high; third,
it reflects the CWB's attempt to download the blame for their lacklustre
selling on to the backs of farmers who are critical.
Torkelson wasn't alone in suffering at the CWB's hands. Organic producer
Cyril Stott of Brandon, for example, calculated that he lost $13,500 from
his 2002 crop in the bottomless-buyback-hole. These kinds of losses happen
all the time in organics, but you don't hear about them.
No less important, but often overlooked, are the organic sales that are
actually lost. Dwayne McGregor farms in Chaplan, Sask., and he blames the
CWB's high buyback as a contributing factor behind his lost sale to Japan.
Arnold Schmidt near Maple Creek lost his sale to the U.S. because of the
CWB.
Even though organic buybacks are gouging profits, strangling Prairie sales
and stopping contracting, the CWB continues to withhold licences. Eastern
Canadians and other countries then seize the Western farmers' lost
economic opportunities.
Most CWB directors refuse to acknowledge the disadvantage that Western
organics face. The truth is clear to others, including the Western Barley
Growers, the Canadian Chamber of Commerce, the Standing Committee of
Agriculture and Agri-food, Agri-core United and the Grain Growers of
Canada. All have adopted policies supporting marketing choice for farmers.
The Alberta government is also firm in its stance for equal marketing
choice opportunities. Economic hurt is embodied in Western alienation, and
until each Westerner has the same economic opportunities that Easterners
enjoy, resentment will grow.
Is there a solution? Yes. Organic farmers have provided the CWB with an
instant, no-cost solution. The CWB could simply grant export licences to
Western organic farmers, the same as it already does for Eastern farmers
and others. No changes in the legislation are required. |
