Operation
The farmers deliver their wheat and barley to grain elevators throughout the crop year. The Board acts as a single desk marketer of wheat and barley on behalf of prairie farmers. Upon delivery to an elevator, farmers receive an initial payment for their grain from the CWB that represents a percentage of the expected return for that grade from the pool account. After the end of the crop year, July 31, an interim payment and a final payment are paid to farmers, in addition to their initial payment so they will have received 100 percent of the return from the pool for the grain they delivered. The initial payments are guaranteed by the Government of Canada so that farmers will receive payment even if there is a deficit in the pool account. Initial payments are set with a risk factor built in to guard against the event that price expectations are not met.
Compliance with the wheat board for most farmers and elevators is not voluntary and is punishable by fines and/or imprisonment. Farmers from Eastern Canada and most of British Columbia are not controlled by the Canadian Wheat Board and may market all their grain on the open market. The area of British Columbia known as The Peace River District falls under the jurisdiction of the Canadian Wheat Board.
From the standpoint of supporters of the board and labour unions, the board gives individual farmers increased marketing power in a world market which gets them a higher price than they would otherwise get, not only through the efficiencies of scale, but as well by exercising oligopolistic marketing power on the selling side, especially for Durum wheat. A study conducted in the mid 1990s suggested that farmers gained on average a premium of $13.35 a tonne on wheat as a result of the board's monopsony. Supporters of the monopsony fear that an end to the board would put farmers in a situation like that in the early part of the 20th century where farmers effectively competed with each other to sell their grain, a situation that effectively put them at the mercy of big agribusiness and the railroad monopolies and reduced farm incomes. The counter-argument is that producers of non-Board crops such as canola do not seem to have this problem.
Read more about this topic: Canadian Wheat Board
Famous quotes containing the word operation:
“Human knowledge and human power meet in one; for where the cause is not known the effect cannot be produced. Nature to be commanded must be obeyed; and that which in contemplation is as the cause is in operation as the rule.”
—Francis Bacon (1560–1626)
“You may read any quantity of books, and you may almost as ignorant as you were at starting, if you don’t have, at the back of your minds, the change for words in definite images which can only be acquired through the operation of your observing faculties on the phenomena of nature.”
—Thomas Henry Huxley (1825–95)
“It requires a surgical operation to get a joke well into a Scotch understanding. The only idea of wit, or rather that inferior variety of the electric talent which prevails occasionally in the North, and which, under the name of “Wut,” is so infinitely distressing to people of good taste, is laughing immoderately at stated intervals.”
—Sydney Smith (1771–1845)