Collection III: Facilitating New Grain Export Channels -- Preamble




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Volume III
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As we had pledged at the end of our last compendium of articles, we continued posting on a weekly basis; here we have compiled Volume III, consisting of our latest 10 articles. We are very pleased to see our following increase, now up to more than 6,000 site-visits, totaling almost 500 hours of engagement, not counting articles downloaded and read at your leisure. Also, we are delighted with the interest our Facebook-page has generated, with endorsements and lively debates. Obviously, our mission has struck a chord in the Prairie agricultural community, and so we are pressing ahead with our mandate to facilitate new export channels.


As you may recall, in closing Volume II we had outlined our priorities for 2022-Q2:


Producer-engagement: Our Farm-Profile Program was slow to get started, but now we have more than a dozen interested subscribers. We have been refraining from bugging producers through the seeding-season (unfortunately slow and protracted this year) but it looks like we will have 15-20 profiles online by August. Our Virtual Townhall Meetings were not a great success, but you will hear from us about field visits during the summer months. Also, as we will get to at the end of this Volume, we are now launching our Trade Forum to kick-start actual trading initiatives.


Recasting our global image: Probably more than anything else, this has been our focus in the last few months. In addition to farm-profiles that will feed directly into this initiative, much of the work in the last quarter has been to lay the foundations for regional-profiles that will extoll the virtues of Prairie agriculture. Moreover, we have now finalized the conceptual design of our new platform, Virtual Grain Mall, a promotional window into the Prairies, together with a Trade-Facilitation layer, and we are very hopeful of our funding initiatives to make this platform-project a reality.


Need for market research: This is an integral part of our trade-facilitation mission – not only in understanding the competitive threats our current bulk-exports face, but also in targeting new markets for direct-export channels. But there seems little interest in engaging in market research, not even from grain-commissions or producer-associations. We have done what we could with our internal resources in the last few months, to at least understand the implications of the current turmoil global grain markets are in, which we will come back to at the end of this Volume.


Now let’s come back to the contents of this Volume. Our efforts in the last three months followed two tracks: platform design-and-development from one end, and bringing visibility into the nature of direct-sales from the other. In posting weekly articles, we tried to mix and match themes from both ends to keep our followers interested and engaged in the progress we are making in pursuing our trade-mission.


Platform design and development


Our last volume had opened with an article outlining A Framework to Recast our Global Image. The Prairies have long been a major grain-exporter on the world stage, known for the quality of their staple-crops, initially wheat and in time also canola. But the world knew us primarily as a source of bulk-exports, and had little visibility into our grain-economy, which is arguably among the most advanced, with a huge variety of quality crops that can be procured directly from primary-producers.


To promote direct-sales, sourced from farms and delivered to final-destinations in containers, with crop-integrity intact and as necessary identity-preserved, we need to recast our global-image. We had developed a 5-prong framework to promote this new image: advanced-farms, agronomy-capacity, crop-variety, quality-assurance, and logistics-services. In this volume, you will find two more articles on this theme:

  • An action-plan for achieving our paradigm-shift (Article #24)

  • Our path from an information-portal to a trade-platform (Article #25)

The center-piece of our trade-platform will be a Virtual Grain Mall, a promotional window into our grain-economy that prospective importers from all around the world can visit to see all our virtues online. Instead of going on trade-expeditions, buyers can go online to see our primary grain-sources displayed as virtual-stores, and our regional attributes through virtual-pavilions. Built on this platform will also be a trade-facilitation layer for buyers and sellers to meet and pursue sales-contracts.


We had started the conceptual design of this platform late last year and in the last 3 months made huge progress in laying down its technical foundations. These details, be it in handling the data-volume (from 1000s of farm-profiles and their updates) or incorporating audio-visual display tools into the platform (for virtual pavilions or special thematic shows), were by no means trivial, but we now know the arsenal we need to incorporate into the platform to achieve the “showcase” we have in mind.


However, we did not think much of these technical platform-design features would be of interest to our followers. Instead, we focused our articles on the content we wanted to include in our promotional-window, the Virtual Grain Mall. To this end, we defined the “ecosystem” that supports our grain-economy, arguably one of the most advanced in the world. We posted 4 articles on the ecosystem and its three principal spheres – 3 published in this volume and one more to come in the next:

  • An overview of the grain economy ecosystem (Article #21)

  • Deepening our engagement in the production-sphere (Article #22)

  • Reaching out to the supply-technology sphere (Article #26)

  • Functional importance of export-logistics sphere (Upcoming in June 2022)

Virtues of direct-sales


At the core our mission lies a shift away from bulk-trades to direct-sales, a call for a paradigm-shift as we commonly refer to. But rather than an abandonment of bulk-trades, this was always meant to be a call for a partial shift to direct-sales that will bring more market discipline to all grain-trade channels thereby increasing producer-margins and leading to more crop-diversification. We naturally touch on this topic in all our articles, but into 2022-Q2 we realized the matter required more attention.


In Article #23, Making grain-markets work for producers, we looked back on how freeing up certain crops from the monopsony of the Canadian Wheat Board (CWB) had led to the formation of direct-sales channels, basically corporate grain purchases directly from production sources, farms. This had happened not just in our domestic trades but also transborder ones to the US, bringing more market discipline on all these trades, even those that went through consolidation channels in the hands of intermediaries. We were calling basically for the same in overseas grain-trades.


While we thought the matter was settled, Article #23 led to even more controversy, not over our mission, but the CWB. We turned to the topic with two more articles – Reflecting on CWB and looking ahead (Article #27), Breaking loose from bulk-trades in the post-CWB era (Article #28). There were many lessons to draw from the unwinding and the eventual abolishment of the CWB-model, how direct-sales had taken root first in non-board grains and later also board-grains, wheat and barley.


We returned to the topic once again, this time why they had not taken root in overseas exports – Mystery of overseas-direct sales (Article #30). It was natural for our overseas exports to be captive to bulk-trades under CWB, main custodian of bulk-systems together with wheat-pools. However, what was natural for wheat-barley was not so for canola, always a non-board grain. In short, what happened now was an oligopsony of private grain companies replaced a public-monopsony, perpetuating the captivity of most our overseas grain exports to the bulk-system.


In trying to unravel this mystery, we tackle the myth of bulk-trades being the most efficient way of exporting to overseas markets. We also tackle the other side of the myth that overseas markets are too risky to export to through direct-sales channels. But we are aware that these myths will persist with all the disinformation being propagated by vested-interests – much more to come on this topic in future articles.


In the interim, we also wrote an article on the trade opportunities that Russia’s invasion of Ukraine presents, mainly through bulk-trades but also with prospects of direct-sales – Responding to the turmoil in global grain markets (Article #29). Even before our trade-facilitation-platform was ready, we structured a program to respond to these opportunities – more to come on this at the end of this volume.

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