I am Khar.
Killer of threads.
Hear me ramble! On subsidiesRobair Robair:
The wheat board is owned and controlled by farmers. It is not subsidized by tax payers.
This is not the government deciding what to do with government assets. It's the government deciding what to do with farmer's assets.
That depends on your definition of subsidy.
The Canadian Wheat Board functions through a three payment system. The first one is based on the expected returns on selling the wheat. In cases where the CWB cannot cover these initial payments with available funds, the Canadian government is obligated to step in to fund that gap. This, essentially, infers sovereign debt status on the CWB due to Canada's backing -- it is incapable of failing financially. Admittedly, this is not a strong subsidy compared to some others out there, but the board has been subsidized via this method to something like 1.3 billion dollars over it's lifetime, and I'm not sure whether or not that value has been corrected for inflation. That value was reported in 2003, but it sounds like the CBC article merely aggregated the various nominal values -- the real cost could be much higher (10 bucks today is worth 10 cents then kind of deal).
This is defined as a structural subsidy, for the record. Unfortunately, today the media mostly describes subsidies financially, in the form of tax breaks or direct money transfers, which are common in Canada. Economically, the term subsidy has many more meanings. The differing definitions economically and financially lead to vagueness, and vagueness often leads to controversy. Then Yoda steps in and says something about how this all leads to the Dark Side.
We also pay through differences in pricing, taxation and so forth. Keep this in mind. Remember, the Wheat Board controls all Western (save most of BC) production of Wheat and Barley, including that for human consumption -- we pay the price they set. Canadians do pay -- just indirectly. Not to mention that this article demonstrates procurement/political subsidies by virtue of what is stated within. In the end, you are right financially, which is how media stations typically report. Underneath the financial surface and into the economics of it all, the situation is a bit more wavery.
Those who complain the most about our subsidies are... the Americans (through various WTO and NAFTA complaints). Who directly subsidize their farmers, and very much directly. No matter how you define it, financially or economically, it is a subsidy. Then again, the States seems to enjoy complaining about NAFTA even though they have similar or more intensive benefits much of the time. They did not win court debates initially, but our victory has been thrown out since.
On the topicSpeaking of tasteless acts, this situation has seen some nasty activity from both sides -- active spending for lobbying from the CWB, replacement of the CWB president by Strahl, and so forth. The Canadian government hence does play a role in the CWB. It may be ran by farmers, but it was created and can still be directly controlled at the will of the Canadian government. In part, this is why taxation is different -- the process goes through a government agency.
Concerns over our Wheat Board internationally have been around for years. Just this April, it was under fire at the WTO, in fact, as laws were considered which specifically targetted the functionality of the Wheat Board. Arguments about subsidies between first and third world countries are historically bad... but in those cases, Americans and Europeans rush to our defense, since anything that hurts us would cripple their heavily controlled and subsidized industries.
Ironically, Western Farmers involvement was made compulsory by the War Measures Act when it was enacted way back during the Second World War. That it continued in such a broad ranging capacity until a few decades ago, of course, did not impress the West for a decent amount of time ("Gee, why are Westerners always so angry?" they ask as they bend Alberta over the table and reach for the lube), although the current structure has a much better reception amongst Prarie farmers. The initial goal of the board was, in part, to influence wheat prices, especially during the Great Depression back in the dirty thirties. Since then, it's scope in what it controls has been significantly diminished to just wheat and barley, in part because of various problems between then and now which required a reduction of control on the movement of goods (like feed grain control, of which my family remembers vaguely being in the cattle industry -- the last farmer in my more immediate family just stopped being one, incidentally).
There are positives. It gives oligopolistic selling power, massive efficiencies of scale, smooths out price fluctuations, raises income (at the time) and a large group of people and output being wielded in a single hammer. The power behind the CWB and what it represents is surprisingly large and expansive, and at times it has been good for Canadians to have such power behind them. It also got rid of a decent amount of control and competition amongst not just farmers, but large companies. The idea was the skip the middle man and simply have the farmers directly sell their wheat at forecasted market prices. It also keeps land prices high, and many farmers work their whole lives -- those who saw it rise and saw the benefits way back when could pay the costs if the program is stopped or if participation is not mandatory.
However, that was then. The Second World War was long ago, the dirty thirties are a thing of the past (unless 2030 is an
awesome year for porn) the original agribusinesses are long gone and the pricing power is not as large a percentage as it once was. Speaking as someone who still spends a good deal of time keeping track of farm stuff ('tis the farm blood) there is a fairly sizeable movement who feel that they are being undercut because they cannot sell elsewhere -- they have access to better markets, but mandatory use of the CWB is enforced regardless of location. They do not, historically, appear to be a majority -- those favouring a single desk policy have a plurality in votes and seats. This may have changed recently. We know that they can do market themselves -- it's only wheat and barely they have control over, everything else is free. I know some folks complain about a lack of a segregated market for organic or specific GM forms of grain.
There's a few questions now. Is the board effective with 60% of farmers working it, instead of 100%? Are we driving production to other products because of the existence of the CWB? Is this worth keeping in the eye of international pressure (although, tbh, I doubt we'd gain much political capital losing it)? Would these 40% who don't support the wheat board do better elsewhere? Are those who supporting the wheat board actually supporting the idea, or just plan to use the system? Are those against it actually not going to use it, or are they just open to letting other people use it?
On the articleUnsurprising, really. This is the NDP position, and what they represent, and they stand by their guns. Their position certainly has their merits and they want them known. I've seen my fair share of provincial governments run contrary to federal majorities, although it's been a while since I remember reading anything about a left provincial government arguing with a majority right federal government.
Not at all impressed by what Oberg stated about it being paid for by Farmers. This is an untruth -- historically, the government has had to pay for the wheat board at times, and the simple fact that they have to has had ramifications on how the board functions. However, in an absolute sort of way, he would be correct -- Farmers spend a lot more on the program itself. Canadians, however, may have to pay for the results of that through pricing alterations caused by the CWB -- which can drive prices up.
Not at all impressed with the response from Ritz. That is a bit of an overstatement. I don't know if it is fearmongering, but there is a degree of unknowns in this situation. A province defending one of their assets against the federal government is not exactly new, as Manitoba is the seat of the Wheat Board.
Not at all impressed by Mr. Spence and similar people either. The suggestion is to remove a monopsony, but the mayor of Churchill and his followers make it sound as if 100% of the Wheat Board is being shed. There is massive farmer support for the CWB - business won't dry up overnight, the headquarters and administration will still be needed. I found it kind of funny that all at once they are stating that they are fighting for want Farmers want... and then basically state that if the CWB goes so does all the product. Sorry guys, you get
one position.
Just generally not impressed. Over-reactions and over statements from all sides to this situation. I'm not sure how I feel about the Selinger government doing this, but they are the elected government of Manitoba, they were voted in with a defintive plurality of votes and I feel they have the right to do this. As long as they don't spread misinformation, I am fine -- same for the Conservative position.
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