Thursday, December 07, 2006

Playing In The Pool

While eyes are focused on the debacle that is the Tories failed attempt to impose dual marketing in the Wheat and Barley market, with their backdoor attempt to dismatle the Wheat Board lets look at who benefits from dual marketing.

And no it's not about competition, or better prices, its about private purchasing monopolies versus public producer monopoly. To whit the two major suppliers of Grains in the west to buyers is Saskpool and Agricore.

Distributors/buyers versus Farmers/Producers. The irony is that the Wheat Board was not a creation of socialists but the producer advocates in the UFA and Labour in the Alberta Government in the Thirties and later the Social Credit Party.

UFA was founded in 1909 as a government lobby group following a merger between the Alberta Farmers' Association and the Canadian Society for Equity. UFA began as a non-partisan organization who's aim was to promote the interest of farmers in the province. In 1913, it was able to pressure Alberta's Liberal government to organize the "Alberta Farmers' Cooperative Elevator Company" which eventually became the "United Grain Growers".

The UFA was a believer in the cooperative movement, and supported women's suffrage. In 1912 women were permitted to become members of the parallel United Farm Women's Association, and in 1914, women were granted full membership rights in UFA itself.

By 1920, UFA had become the most influential lobby group in Alberta with over 30,000 registered members.

Agricore is now under a hostile takeover bid by Saskpool in anticipation of the Tories dual marketing scheme.

Saskatchewan Wheat Poo
l cut its loss in its first quarter by exporting more grain, and expects bigger shipments to continue, Canada's second-largest grain company said on Thursday.

Saskpool -- which has launched a hostile bid for bigger rival Agricore United (AU.TO: Quote) -- reported a loss of C$5.1 million ($4.4 million), or 6 Canadian cents per share, for the quarter ended October 31. That compares with a loss of C$7.7 million, or 9 Canadian cents a share, a year earlier.

"We believe margins in our grain business will improve over last year given the high quality of this year's crop and robust export movement to date," Chief Executive Mayo Schmidt told analysts on a conference call.

Revenue was C$341.3 million, up 25 percent from year-before sales of C$273.9 million

And who should have investments in Agricore besides the old Alberta Wheat Pool and the Alberta Government? Both notoriously Anti-Wheat Board. Why Brian Mulroneys old pals the agribusiness monopoly; ADM.

U.S. grain giant Archer Daniels Midland (ADM.N: Quote) owns 23.4 percent of Agricore shares, and will see its stake rise to 28 percent on January 10, when Agricore redeems debentures for shares.

And of course its about Free Trade, despite the failure of the Doha round of WTO talks. The reason Agriculture and Agri-Foods Minister Chuck Strahl is dividing the issue into two; Barley and Wheat and holding a plebiscite on barley marketing only is the support they have amongst their Reform base of some Prarie Barley farmers.

We cannot ignore trade implications when we decide how to vote on wheat or barley marketing. Support for the single-desk plays into the hands of those who would build and maintain trade barriers along our borders.

Tom Hewson, vice-president, Western Barley Growers Association.

For more coverage of the Wheat Board from the Left see Buckdog.


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