Saskatchewan, Canada, February 17, 2005:
There are some interesting parallels between what
is going on in the beef industry today and the bid by a coalition
of farm groups to purchase the government hopper cars. The
Farmer Rail Car Coalition (FRCC) has been actively pursuing
car ownership for more than a decade. From the start, the
FRCC said it had several goals in mind. One was to give farmers
ownership of a major transportation asset so they could have
a "seat at the table" in discussions about grain
transportation. A second was to ensure that there would always
be an adequate car supply to move prairie grain.
The FRCC feared that grain transportation, if left to the
devices of the railways and grain companies, could once again
find itself in the situation that prevailed in the 1960s and
early 1970s. At that time, the railways were operating a fleet
of obsolete box cars, while other bulk commodities were moving
in hopper cars.
In the wake of BSE, the cattle industry in Canada has had
a slap up the side of the head. Since then, farmers have moaned
loud and long about the system that evolved over the last
several decades. In that time, with no farmer involvement
in the packing industry, it came to be dominated by two major
players. Cull cow slaughter left the country, and commercial
meat users, like fast food restaurants, began to source their
meat from other countries, since manufacturing beef wasn't
available in Canada.
For the most part, Canadian farmers and ranchers were fairly
happy with the situation. Calf prices were pretty good, and
the American market sucked up whatever cows we threw its way.
Canadian farmers and farm organizations, with the exception
of the National Farmers Union, were oblivious to the concerns
being expressed in the United States about the problem of
packer concentration. While farmers there launched lawsuits,
our industry was concentrated in even fewer hands than theirs
The advent of BSE showed we were living in a fool's paradise.
Unknowingly, we were but one sick cow away from disaster.
When it struck, the packers took full advantage of it to exploit
Canadian farmers. (Before you dispute that one, note that
retail prices have not moved downward to any great degree,
and packers are shipping more beef than ever to the U.S.)
Nor was the situation limited to cattle. Well known sheep
industry watcher Peter Schroedter recently blasted lamb processors
in Canada for the "ruinous pricing policy" that
"put a lot of people out of business". He said it
would be "a long time, especially in the west, before
producers forget or forgive the packers for the miserable
pricing policy imposed on the industry after the U.S. border
The hand wringing that followed eventually evolved into determination
to take back the beef industry. A press release issued February
3 by the Agricultural Producers Association of Saskatchewan
shows the depth of this concern. APAS President Terry Hildebrandt
called for farmers to "take back control of our industry".
In speaking of farmers concerns, he said, "The most common
message we have heard is that producers must take ownership
and control of the packing, processing, and marketing aspects
of the beef industry."
It is a far cry from the hands-off attitude the beef industry
trumpeted for the last several decades. It is also a far cry
from the philosophy of some of the commodity groups that claim
to represent growers of various crops. The debate over the
Canadian Wheat Board (CWB) is a case in point.
Groups like the Western Canadian Wheat Growers and the Western
Barley Growers Association have long insisted that grain marketing
should be left in the hands of the grain companies, and that
grain transportation should be the sole business of the railways.
In that regard, they tried a couple years ago to force the
farmer-controlled CWB out of its position of managing transportation
logistics for Board grains. They wanted the Board to take
possession of grain only as it was leaving the port terminal
and entering the ship's hold.
That kind of thinking would give us a grain industry like
the cattle industry - a hundred thousand small producers at
the mercy of a tiny handful of grain companies.
There are many other examples where some farm groups have
tied to keep farmers from controlling any part of the industry
past the farm gate. Producer car loading facilities are another
example. It took the BSE crisis to teach cattle producers
they can't rely solely on the benevolent hand of the free
market. The market just isn't that free any more. What will
it take to get grain producers to realize what they've lost
in the grain industry?
© Paul Beingessner (306) 868-4734 phone 868-2009 fax
© Paul Beingessner, firstname.lastname@example.org
. The author is a columnist, transportation consultant and
third-generation farmer in Truax, Saskatchewan.