February 28, 2006
from The Ram's Horn, #236, February 2006
Now that the so-called Conservative Party has gained the upper hand as a result of the Jan 23rd election, we can expect to see Cargill’s policy objectives implemented even more quickly than under the Liberals. The Canadian Wheat Board is at the top of the hit list; getting rid of the Canadian Wheat Board as single-desk marketing agent for Prairie wheat and barley headed for export has been a Cargill objective for about half a century. The 300-member Western Canadian Wheat Growers Association will surely be its front man in the operation, along with other corporate ghosts speaking for those farmers that still harbour illusions about their entrepreneurial status, such as the Canadian Agri-Food Trade Alliance.
“According to Dr. Richard Gray, head of the Department of Agricultural Economics at the University of Saskatchewan, loss of the CWB single-desk status would result in a cascade of events that would fundamentally alter the economics of grain production in western Canada. In a paper prepared in November, 2005, Gray points out that the loss of the CWB’s single desk status would lower returns to farmers, reduce price transparency and market development activities, allow the railways to gain complete control over transportation, and shift power away from small and independent grain companies. A further issue for farmers would be the loss of the opportunity to ship producer cars as the CWB becomes a small grain company with no inland or port facilities, dependent on other grain companies to handle its sales. In the last decade, farmers have invested in producer car loading facilities and have refined the concept to make it more effective and less risky. As producer car facilities go under, short line railways follow. . . As the short lines go down and this investment is lost, other dominoes follow. Processing facilities built on short lines will, of course, also fail as their rail transportation disappears. The loss of short lines would close the door to other economic activity that might have found a home in rural communities dependent on short line rail.” – thanks to Paul Beingessner
Cargill makes no bones about where it sees the money: in food manufacturers. Len Penner, the new president of Cargill Ltd., the corporation’s Canadian subsidiary, says that “We’re really poised for some further growth in Canada.” Penner didn’t identify any particular projects, but he did say that, “The idea for us is to provide solutions that can add value for the food manufacturers.” He went on to say that the company faces three challenges: industry overcapacity, transportation logistics and the economic well-being of farmers. Consolidation could be part of the answer, he said. “The overall health of the industry is a concern. It’s not good for an industry to have players that are not healthy.” He went on to say that it is crucial to ensure farmers are able to make a return on their investment, something that hasn’t been the case in recent years, thanks to bad weather, mediocre commodity prices, high input costs. . . There is no simple solution, Penner said. Back in the 1970s, when the company first appeared in Western Canada, Cargill became a dirty word for many farmers who viewed it as a foreign threat to the Prairies’ co-operatively-based grain industry. Now, with the co-ops gone and farmers facing tough economic challenges, that attitude has almost dissipated, according to Penner. – WP, 5/1/06
It must be wonderful to be so innocent. Penner has worked for Cargill for 30 years, yet he presents himself as unconscious of the role Cargill has played in bringing about the situation farmers face today. Penner makes his corporate perspective obvious, however, when he says that it is crucial for farmers to make a return on their investment. As for solutions, Cargill could, without any significant loss to its corporate welfare, charge the farmers less for the fertilizers it sells to them and pay them more for the commodities (livestock, oilseeds and grains) it buys from them. These measures might not provide a return on investment for farmers, but they might make it possible for them to make a living.
Cargill’s Harvest Health plan
In the ongoing efforts to secure a better grip on their suppliers – farmers, that is – agribusiness companies are becoming more creative with the incentives they offer farmers to lock in deliveries of their corn, soya and wheat. Cargill is now offering to pay US farmers up to $5,450 a year for health care if they pledge to sell a certain amount of grain to the company. However, many farmers send their grain to cooperatives they have invested in and in whose success they have a stake, and some farmers shy away from long-term commitments to one company, a requirement of Cargill’s health plan. – source: Reuters, 2/2/06
Now that the so-called Conservative Party has gained the upper hand as a result of the Jan 23rd election, we can expect to see Cargill’s policy objectives implemented even more quickly than under the Liberals. The Canadian Wheat Board is at the top of the hit list; getting rid of the Canadian Wheat Board as single-desk marketing agent for Prairie wheat and barley headed for export has been a Cargill objective for about half a century. The 300-member Western Canadian Wheat Growers Association will surely be its front man in the operation, along with other corporate ghosts speaking for those farmers that still harbour illusions about their entrepreneurial status, such as the Canadian Agri-Food Trade Alliance.
“According to Dr. Richard Gray, head of the Department of Agricultural Economics at the University of Saskatchewan, loss of the CWB single-desk status would result in a cascade of events that would fundamentally alter the economics of grain production in western Canada. In a paper prepared in November, 2005, Gray points out that the loss of the CWB’s single desk status would lower returns to farmers, reduce price transparency and market development activities, allow the railways to gain complete control over transportation, and shift power away from small and independent grain companies. A further issue for farmers would be the loss of the opportunity to ship producer cars as the CWB becomes a small grain company with no inland or port facilities, dependent on other grain companies to handle its sales. In the last decade, farmers have invested in producer car loading facilities and have refined the concept to make it more effective and less risky. As producer car facilities go under, short line railways follow. . . As the short lines go down and this investment is lost, other dominoes follow. Processing facilities built on short lines will, of course, also fail as their rail transportation disappears. The loss of short lines would close the door to other economic activity that might have found a home in rural communities dependent on short line rail.” – thanks to Paul Beingessner
Cargill makes no bones about where it sees the money: in food manufacturers. Len Penner, the new president of Cargill Ltd., the corporation’s Canadian subsidiary, says that “We’re really poised for some further growth in Canada.” Penner didn’t identify any particular projects, but he did say that, “The idea for us is to provide solutions that can add value for the food manufacturers.” He went on to say that the company faces three challenges: industry overcapacity, transportation logistics and the economic well-being of farmers. Consolidation could be part of the answer, he said. “The overall health of the industry is a concern. It’s not good for an industry to have players that are not healthy.” He went on to say that it is crucial to ensure farmers are able to make a return on their investment, something that hasn’t been the case in recent years, thanks to bad weather, mediocre commodity prices, high input costs. . . There is no simple solution, Penner said. Back in the 1970s, when the company first appeared in Western Canada, Cargill became a dirty word for many farmers who viewed it as a foreign threat to the Prairies’ co-operatively-based grain industry. Now, with the co-ops gone and farmers facing tough economic challenges, that attitude has almost dissipated, according to Penner. – WP, 5/1/06
It must be wonderful to be so innocent. Penner has worked for Cargill for 30 years, yet he presents himself as unconscious of the role Cargill has played in bringing about the situation farmers face today. Penner makes his corporate perspective obvious, however, when he says that it is crucial for farmers to make a return on their investment. As for solutions, Cargill could, without any significant loss to its corporate welfare, charge the farmers less for the fertilizers it sells to them and pay them more for the commodities (livestock, oilseeds and grains) it buys from them. These measures might not provide a return on investment for farmers, but they might make it possible for them to make a living.
Cargill’s Harvest Health plan
In the ongoing efforts to secure a better grip on their suppliers – farmers, that is – agribusiness companies are becoming more creative with the incentives they offer farmers to lock in deliveries of their corn, soya and wheat. Cargill is now offering to pay US farmers up to $5,450 a year for health care if they pledge to sell a certain amount of grain to the company. However, many farmers send their grain to cooperatives they have invested in and in whose success they have a stake, and some farmers shy away from long-term commitments to one company, a requirement of Cargill’s health plan. – source: Reuters, 2/2/06
posted by Cargill Profile at
7:39 AM
