Archive for August, 2012

Good planning or good luck

Thursday, August 30th, 2012

Success can come from two sources, planning and blind luck. With so much information available today, planning is a lot easier than blind luck. In days gone by, blind luck had a bigger part to play.
It’s been interesting to note the ongoing fight over the Canadian Wheat Board and it’s also been very interesting to try to sort the truth out from the fiction, the wheat from the chaff. 
When demands for a CWB came about many decades ago, the wheat market was a very complex machine. Wheat was grown on hundreds of thousands of farms, not just in Canada but around the world. If farmer had couple of hundred acres of wheat, he was a big farmer in the 1930s. A lot more wheat was grown in 50 acre or 25 acre fields than in larger chunks.
Marketing information amounted to reading a weekly newspaper with 10-day-old information in it or listening to the noon news on battery radio. Longer term information might be received from one of the five grain company elevator agents in the town, a hour and half horse drawn wagon ride away from the farm.
Things didn’t change a whole lot through the 50s and even 60s. Market information came from those same sources and the ride to town was shortened to 20 minutes, this time in a one ton truck.
Today, things are much different, the number of farms and farmers is greatly reduced. There are more framers with 2,000 acres of wheat than there are those with 50, at least in North America. News of market trends comes right to the tractor seat by way of an iPhone or some kind of smart phone. Newspaper reports of market trends may make leisure time reading, but that’s about all. Perhaps some longer term trends can be explored in a written format but the price of today’s wheat or January’s wheat is instantly in the farmer’s hand, literally in his hand, on the cell phone.
Marketing information is out there for all to see and hear almost immediately.
When the CWB came back into being during WWII it was not, as many folks believe, set up to get a better price for farmers, it was to slow down the price rise so Britain could afford to buy wheat. Had the market gone straight ahead at the rate it was going, it’s doubtful if England could have fed its own people, let alone all the troops assembling on its shores.
During the late 40s and into the 50s, farmers allowed the CWB to become a thing of beautiful lore, the mechanism by which farmers, with only their grain scoops in hand, could beat back the big bad grain companies. It may have been more myth than reality but it made for good story telling. Every farm had a story about how grandpa got messed over by an unscrupulous grain buyer. The stories were likely true but it’s doubtful if CWB did much to prevent the problem.
The CWB today is putting out contracts, voluntary contracts, and time will tell if they can market wheat without a monopoly. They should be able to do so. They have the name, a reasonably good reputation, a host of world wide contacts and a team of marketing experts.
Like the farmers, they need some planning and some blind luck. Those two factors are still in play.
At the farm level, a farmer can pick the best fields, pick the best varieties and sign the best contracts. He can buy the best machinery he can afford, apply all the right fertilizer and chemicals. He can hope, he can pray. But if the rains don’t come or if July is too hot like it was this year, then one starts to wonder about blind luck.
Then there’s the price. Feed grains are rising in price, there’s a shortage due to the drought in the U.S. south-west. There’s the legislated  demand for grain to go into ethanol, a law that should be scrapped immediately by the way. It makes no sense to put food into ethanol especially when food is in short supply and oil is in good supply. Besides gas is somewhat optional and food isn’t.
So when all is said and done, a farmer can lean a lot less than they used to on blind luck and depend much more on informed planning. But then again, there’s still that blind luck factor. Or is it faith? You decide.

Local is better

Friday, August 3rd, 2012

It will likely take a lot of years for senior governments to catch on to the reality that local governments, both municipal and school boards, are facing an infrastructure deficit. The federal government, with a lot of prodding from the Federation of Canadian Municipalities, is slowly coming to the realization that without infrastructure, we don’t have a sustainable society.
The problem is made all the worse by the several factors.
When money is collected in taxes by senior governments and then doled out on a project by project basis, it is indeed welcomed by the winners but it does nothing to help the losers in the government grants lottery.
The other problem with collection and doling by senior governments is that there’s a large expense in the actual doling out of the money. Bureaucrats spend time and money designing the application criteria. They ponder questions like, “What is infrastructure?” Is it sewer and water and roads or is it statues and rinks and ball fields and riverbank re-construction? Is it walking trails or renewing heritage buildings. Once the criteria are debated and set up, then there’s the whole advertising process, the application process, the awarding process and then the evaluation process. The net result is that a lot of dollars get siphoned off on the way home to the municipalities.
That doesn’t even account for the design criteria. If federal and provincial dollars are involved, then the criteria for design becomes more complicated. Safety is a factor for certain but some design criteria go well past safety as engineers, architects and government bureaucrats debate everything from paint colours to gravel sizing.
There is a simpler way of doing things that eliminates almost all of the problems listed above. The senior governments collect gas and other taxes. They remit a portion to municipalities every year. What they could do is send a thank you letter to all the bureaucrats and simply send out a larger percentage of the taxes.
Currently municipalities can spend their gas taxes just about any way they want. Locally there are two different views of what is the priority for infrastructure. Minnedosa is concentrating on an excellent new recreation centre. Neepawa has leaned more towards water and sewer projects. That’s been their separate and quite different stated and practiced view of infrastructure. Neepawa invested infrastructure grant money into two water wells, two pipelines and an upgrade of the water treatment plant. Minnedosa is diligently planning and spending some initial money on their rec complex.
That municipalities choose different paths is a good thing, it’s a reflection of local priorities. However, local priorities will only be met if the feds and the province allow infrastructure dollars or gas tax rebates to be spent on local priorities. It should not be up to the federal or provincial governments to dictate how tax money is spent locally. The local councils, duly elected by the people they go face-to-face with every day, are in much better position to make those kinds of decisions.
Recently the feds had a travelling roadshow to find out what local priorities are. The province occasionally ventures out of Winnipeg to gather opinions. They both need to evaluate what they have heard and make major changes in how they allocate infrastructure dollars. 
The best decisions are local decisions, hopefully senior governments realize that. This is a Sunrize Group internet solution (204)226-2247