October 31, 2002

5:45 PM

This isn't about agriculture.Today, twelve prairie farmers have surrendered themselves to RCMP, rather than pay a fine for their illegal activities. Their mutual crime was choosing to export their wheat crop independently, rather than through the Canadian Wheat Board. Are state-run agricultural monopolies appropriate, especially when their authority is exerted unevenly throughout the country? Do you think the action taken by these farmers is justified?
posted by vesper (17 comments total)

By "authority exerted unevenly", I'm referring to the fact that farmers in Eastern Canada can export their wheat or barley to the US as they choose (all they require is a quick fax from their wheat board office) while prairie farmers must sell directly to the wheat board with no exceptions. (It's mentioned about three-quarters of the way into the CBC story.)
Also discussed in the CBC article, one of the farmers will be going to jail for 62 days for donating (not selling) a bushel of wheat to a Montana 4-H club.
posted by vesper at 5:48 PM on October 31, 2002

uh, what is the diffrence between a 'prairie farmer' and a farmer in eastern canada?

Can you explain why one group is required to sell to this organization and another is not?

---

Anyway, laws restricting capitalism are generaly a bad idea, and should only be implemented when it's clear that capitalism has failed in a certan respect.
posted by delmoi at 5:57 PM on October 31, 2002

In Australia we also have a similar wheat board. We've had stories here about organically grown or similarly specialised wheat being effectively legislated out of existance because all the wheat is just mixed together.

I tend to think that any centralised board with monopoly-like powers is a bad thing. Stories like this more or less confirm it. However, I'm sure there are some Australian wheat farmers that would have lost everything at one time or another if it hadn't been for a fixed minimum price.

Though why/how they got into debt so heavily in the first place is probably an interesting story too...
posted by krisjohn at 6:54 PM on October 31, 2002

Here's a better question: are state-run agricultural monopsonies (of which the the CWB is one) appropriate?
posted by sillygwailo at 6:55 PM on October 31, 2002

Why is it state run? Theres nothing wrong with agriculture collectives they provide an insurance policy against mother nature and the markets so farmers dont go out of business durning hard times. In the USA we subsidize farmers in other ways. A privately run collective or grants to farmers might be a better solution to look at. But I'm no expert on the wheat market and what it requires. The Canadian Wheat Board is %20 of the worlds entire wheat production and is the largest single wheat seller so there could be serious and immediate global consequences to mucking with the system.
posted by stbalbach at 7:35 PM on October 31, 2002

Isn't there another side whereby farmers are garanteed a minimum price for their crop independent of the market? ie if market prices are extremely low the farmer can still survive?

I feel that the article is probably over simplifying the matter, there, must a strategic point that is being overlooked. it just doesn't add up otherwise.
posted by mary8nne at 7:37 PM on October 31, 2002

delmoi: By prairie farmer, I mean Alberta, Saskatchewan and Manitoba. These three provinces are regulated by one body within the CWB, while Ontario and Quebec are run by other boards. The regional regulators have generated this discrepancy.

sillygwailo: w00t, new word for the day:-) Thanks!

I do feel that there's definitely a place for the Canadian Wheat Board, but maybe farmers should be allowed to opt in or out as they wish. The CBC link talks about something like 75% support for the wheat board in the prairies, but clearly some people have a big problem with it. And I think it's apparent that there's something wrong with the way things are right now. I mean, one guy is going to be in jail for two months for donating wheat to a youth organisation...
posted by vesper at 8:08 PM on October 31, 2002

Yurpeens are very used to this.
Let me explain how it works ( Basil Fawlty poking Manuel in the eye not withstanding ):

If you grow stuff, you don't know whether, when it is ripe, it will sell for 1 Euro or 10 Euros, so you don't know how much time/acreage/cowshit to invest in it.
The European government wants its stuff farmers to carry on investing in growing stuff, because they need stuff, so the government promises to pay them 5 Euros per kilo of stuff *whatever the market price*.
Everyone is happy while stuff fetchs 2 Euros per kilo, BUT THEN, ONE DAY, some bugger of a stuff farmer finds out that he can sell his stuff for 6 Euros per kilo, and he does.
This is illegal, and the stuff farmer doing it is the stuff farmers' equivalent of a scab.
The naughty stuff farmer posts his story to Meta Stuff Farmer Weekly and a bronze statue of him is built in Meta Stuff Farmer Town Hall.

But he is still a scab.
posted by godidog at 8:13 PM on October 31, 2002

If you grow stuff, you don't know whether, when it is ripe, it will sell for 1 Euro or 10 Euros, so you don't know how much time/acreage/cowshit to invest in it.
Then you should not be a farmer, you should get a job sweeping floors somewhere, and join a floor-sweepers union.
posted by Catch at 8:17 PM on October 31, 2002

If you grow stuff, you don't know whether, when it is ripe, it will sell for 1 Euro or 10 Euros, so you don't know how much time/acreage/cowshit to invest in it.

Laying off this kind of risk is what futures markets are for.
posted by Slithy_Tove at 8:55 PM on October 31, 2002

yeah, I agree with slity_tove. The market has a system called 'futures' that removes the risk from farming without limiting anyone's rights.

I'm a farmer, I sell X number of 'wheat futures' to some guy in a power suit. The wheat futures are contracts to sell a specific amount of wheat at a certain price at some point in the future (like harvest). The guy in the suit can sell the futures if he thinks wheat isn't going to be worth as much as he's paying at the end of the term to someone who thinks it might.

Meanwhile the hypothetical farmer Me can go right on oblivious to the market, guaranteed to sell my wheat at a certain price point.
posted by delmoi at 9:58 PM on October 31, 2002

Good point Slithy, but the futures market will only guarantee the future _market_ price. That market price may not be enough to justify the farmers' investment in stuff, and they will stop producing it. The governments don't want that, the markets don't care.

Think of it as similar to what the US does with military purchases, dealing out orders to unsuccessful companies just to keep them alive, so they will be there if/when they are needed.

In Europe it's also a way to funnel money from German car workers to French farmers, which is vital because...
Oops, no, got me there...
posted by godidog at 3:20 AM on November 1, 2002

Isn't this that crazy socialism thing that all the kids are talking about? Like, the government taxes the asses off of everybody so they can dictate who sell what to whom, and at what price?

Wouldn't the advantages of a free market eliminate this kind of problem?
posted by hama7 at 3:27 AM on November 1, 2002

Slithy_Tove, delmoi, godidog

Your three posts just explained so much about agriculture for me. Thanks guys.
posted by jsonic at 7:27 AM on November 1, 2002

While we're at it, can anyone explain the concept behind why the government sometimes pays farmers to destroy their crops? Or is this just a myth I've heard?
posted by jsonic at 7:31 AM on November 1, 2002

(sighs.) Who is John Galt?
posted by ZenMasterThis at 7:41 AM on November 1, 2002

We likes gratuitous praises so thanks, jsonic, but, eeuw, it's getting a bit too cosy, so: Slithy is a feul and delmoi nose nuffink!

Meanwhile:
The government would have to pay stuff farmers to destroy stuff to maintain the constant stuff price when the cost of storing or shipping stuff out of the market is more than what the stuff is worth ( but, of course,after all this intervention the whole concept of what stuff is worth is a little fscked up ).

[ I'm making this up as I go along, but I'm starting to read like how I imagine an economics textbook must - Sorry. ]

This John Galt ?
posted by godidog at 8:03 PM on November 1, 2002