Are farmers losing cash, marketing edge post CWB?

An interview I did last week reopened the question of whether farmers have lost a crucial marketing and money-making edge that their wheat and other grains once gave them.

The interview was with marketers of Canadian grain to West Africa, who noted the same problems and upset over Canadian grain quality and consistency that was raised by a Singaporean buyer last spring.

In both cases, the transition from the Canadian Wheat Board-administered system and changes in Canadian Grain Commission grading were said to be behind poorer-than-expected Canadian wheat showing up overseas.

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From interviews this week with a range of Canadian grain trade officials and organizations, it seems to me that the industry has failed, with some buyers at least, to alert customers that getting high-quality and consistent-quality Canadian grain is no longer “business as usual.”

In fact, the business has profoundly changed, and that doesn’t necessarily seem to have been communicated to some buyers.

Interviews over the past couple of years have given me the sense that representatives of Canadian grain companies, industry organizations and farmer organizations have worked hard and travelled frequently to reassure overseas buyers of Canadian grain that this nation will remain a source of the world’s best quality wheat, durum and barley.

That’s been a crucial role for these organizations to play because many customers were worried by the ending of the CWB monopoly and needed to be reassured.

However, perhaps they went too far in reassuring buyers that nothing substantial had changed, when in fact the system is now profoundly different. It can still produce excellent, world’s-best grain, but you can’t just assume you’ll still receive that with a standard contract.

The old wheat board focused on farmer returns and on excellent customer satisfaction. Sometimes critics believed the board went too far to keep customers happy and created an unnecessarily complicated and costly system that might not have made farmers more money than a simpler bulk system like that in the United States.

However, today’s system is based on a handful of private sector grain companies that play in the hard-nosed business of the grain trade with a lighter CGC grading system. The few existing organizations, such as the Canadian International Grains Institute, and new organizations such as Cereals Canada, are trying to fill the CWB’s old customer satisfaction role without having its legal and organizing powers.

Farmers have the most to lose here if this situation has been botched and isn’t soon fixed. No one can take overseas markets for granted, with new export grain competitors emerging in recent years.

And no one should expect private grain companies to put farmer, Canadian or grain industry concerns at the top of their lists of priorities. They are owned by shareholders and serve their needs, which are not necessarily the same as those of farmers. Something that might be valuable for a farmer might not seem worthwhile to a grain company.

Farmers need to keep a careful eye on this. They’re the ones who have the biggest stakes in the game, and they can’t afford to trust private companies, government agencies or politicians to be looking out for them.

It’s their industry and they need to take ownership of this issue to ensure something they have always been able to depend on isn’t being given away without their even noticing.