Hot topics
Letter from CEO to chair of Standing Agriculture Committee
CWB President and CEO President Greg Arason appeared March 1 before the Standing Committee on Agriculture and Agri-Food. David Anderson, parliamentary secretary for the CWB, also appeared before the committee. The following letter from Mr. Arason to James Bezan, the chair of the committee, addresses questions and comments put on the record that day--particularly erroneous claims by Mr. Anderson concerning CWB sales.
March 14, 2007
Dear Mr. Bezan:
Thank you for providing me with the opportunity to appear before the Committee on March 1 and address issues related to the sale of western Canadian wheat and barley through the CWB.
At the time of my appearance, there were questions and comments placed on the record which I would like to further clarify. I would ask you to circulate this additional information to all committee members.
First of all, on the percentage of the Ontario wheat market that is supplied by Prairie farmers – a question that was raised by Mr. Menzies – I suggested on March 1 that it was at least 50 per cent. I would like to indicate that the CWB actually holds about a 60 per cent market share in Ontario. The exact percentage does vary from one year to the next depending on the quality and the quantity of the crop but 60 does appear to be a good average figure. It should also be pointed out that Canadian mills, including those in Ontario, can use U.S. wheat if they so choose. They are under no obligation to source grain from Western Canada.
Secondly, Mr. Anderson who appeared with me on March 1 suggested in his opening comments that foreign buyers may be indicating support for the current system of marketing grain from Western Canada because it gives them “good deals” basically at the expense of farmers’ financial interests. Let me assure the Committee that this is not the case. A 2004 independent survey of CWB customers asked them to rank the CWB relative to its competitors on several attributes. More than 94 percent of the CWB's customers ranked it as good as or better than the competition on product quality (69 per cent better, 27 per cent as good as), consistency of quality (63 per cent better, 32 per cent as good as) and product cleanliness (63 per cent better, 31 per cent as good as). Other service attributes were also ranked very highly. However, the only attribute for which the CWB was ranked poorly was price competitiveness: 37 percent ranked the CWB worse than the competition (i.e. our product is more expensive) while 48 per cent ranked the CWB as good as our competitors. Only eight percent said the CWB was more competitive on price while seven per cent indicated they did not know. A 1997 survey had found very similar results.
Lastly, Mr. Anderson made the comment that it was not possible to ascertain whether or not the CWB was getting fair value for western Canadian grain because “these figures are hidden and there’s no way that we can determine whether it’s a good deal or not”. He re-iterated later that he could not “get the information. I would love to have it but I can’t”. As I indicated at the time of my testimony, the CWB has in fact provided sales values to Minister Strahl’s office for all durum sales to Algeria over the ten-year period from 1996 to 2006 and that we offered to meet with the Minister to go over those values. I wanted to state furthermore that, to my knowledge, the CWB has always agreed with such requests and has provided the Minister responsible for the CWB with whatever information has been required by the Minister to fully discharge his duties and responsibilities. Needless to say, the information is always provided on a confidential basis but it is to be hoped that the Minister will in the near future be able to reassure Mr. Anderson and other government members that the CWB is in fact selling grain to our major customers at values that maximize revenue for farmers.
I hope that this information sheds further light on how the CWB is currently performing as the marketing agent for Prairie wheat and barley farmers. Should you or any members of the Agriculture and Agri-Food committee have any further questions, I would be glad to answer them.
Sincerely,
Greg S. Arason
President and Chief Executive Officer