Newsroom
2003
NDWC charges completely hypocritical
December 19, 2003
Winnipeg – The farmers of Western Canada operate in a commercial environment and the government guarantee on CWB payments is not an export subsidy. The CWB reaffirmed both these facts today in response to allegations made by the North Dakota Wheat Commission (NDWC).
"These charges demonstrate the hypocrisy of the NDWC," said Ken Ritter, chairman of the CWB's board of directors, who farms near Kindersley, Saskatchewan. "They denounce the potential trade-distorting effects of an $85.4 million deficit in the wheat pool, the first in 12 years, when the U.S. government has paid out $3.7 billion in marketing loans and deficiency payments to wheat farmers in that country over the past five years alone."
U.S. government subsidies on wheat production, in the form of loan deficiency and other payments, have averaged $740 million per year. On the other hand, the shortfall in the CWB's 2002-03 wheat pool is the first time since 1990-91 that a deficit has been incurred.
"As we have stated on many occasions in the past, this is plainly a case of the pot calling the kettle black," said Ritter.
The CWB's response to the NDWC's allegations is supported by an independent study released in early 2003 by the Minneapolis-based Institute for Agriculture and Trade Policy that documented how U.S. wheat was being dumped in the international market at values that were 40 per cent less than the cost of production. Furthermore, information from U.S. sources, namely the Environmental Working Group and National Ag Stats Service, indicate that, over the past five years, direct government payments to North Dakota wheat producers alone have totaled $1.8 billion or roughly $1.30 per bushel.
Ritter also firmly rejected NDWC accusations that the CWB had artificially inflated its Pool Return Outlook (PRO) for wheat in the fall of 2002 in order to attract votes for pro-single desk candidates in the CWB director elections.
"The CWB board of directors is offended by these comments", said Ritter. "The director election process has absolutely nothing to do with how the CWB sets its PRO and when it recommends adjustments to initial payments. These are based on market conditions as well as price and foreign exchange forecasts. Anyone looking objectively at events in the fall of 2002 would see that both our PRO and our payments to farmers were justified at the time."
The NDWC's comments and its refusal to consider the facts in this matter demonstrate again how poorly the western Canadian system of selling wheat and barley is understood by certain parties in the U.S. wheat industry. The CWB is committed to greater dialogue with its counterparts in the United States. In the meantime, however, the CWB will continue to fight to remove the unfair tariffs that have been imposed by the American administration on spring wheat and to re-establish full access to the U.S. wheat market.
Controlled by western Canadian farmers, the CWB is the largest wheat and barley marketer in the world. As one of Canada's biggest exporters, the Winnipeg-based company sells grain to more than 70 countries and returns all sales revenue, less marketing costs, to Prairie farmers.
For more information, please contact:
Rhéal Cenerini
Communications consultant
Winnipeg, MB
tel: (204) 983-4497