Optimism prevails at CWB under open market system

Last week, when CWB entered the post-single desk era, the tone of its July 31 news release sparkled with upbeat language. Times have clearly changed from even a year ago, when gloom pervaded the Canadian Wheat Board.

“We begin the new era in a position of strength and a climate of optimism,” president and chief executive officer Ian White said.

“We have a brand new look, a solid business model and the support of thousands of farmers who have told us they intend to market grain with CWB. That makes the future bright.”

While White maintains that “thousands” of farmers continue to support CWB, he will not offer numbers indicating how many contracts they have signed. That could be for competitive reasons, but it does leave farmers in the position of having to speculate on whether they will be joining a robust pool with marketing clout.

However, the CWB option does remain, and rightly so. Eliminating the single desk is one thing, but removing the expertise of CWB staff and pooling opportunities from the options facing western farmers is another.

Furthermore, maintaining CWB is beneficial to Canadian agriculture’s international reputation; foreign buyers have been anxious about our quality control.

For these and other reasons, it is worth giving CWB a real shot at participating in the new grain marketing environment — after all, the more players, the better in a consolidating environment. And things seem to be moving along well for CWB.

“There are many reasons for confidence as we forge ahead anew,” White said. “We will add value for farmers. We have a clean balance sheet thanks to the support of the government of Canada …. We have negotiated business arrangements that will help us succeed.”

The crucial point here is the ongoing support of the government of Canada, which has committed to five years of financial backup. However, agriculture minister Gerry Ritz recently reiterated that the board must come up with a going-forward plan within two or three years.

CWB’s success or failure should be largely based on the degree of farmer support and business, but in this government’s corporate-driven environment, it’s hard to predict whether that will be the case.

Ritz has said that at least two suitors have already offered to buy CWB. The suitors are, naturally, interested in the CWB’s extensive marketing network around the world, and are likely equally interested in the experienced staff.

Ritz said there was no need to rush into such a decision, and that the government would re-evaluate CWB’s role in the next two to three years.

Let’s hope the government sticks to that view, and does not offload CWB before time. Indeed, if the government has already decided to provide five years of financial backup, that should be the window provided to CWB to establish itself.

While many farmers were still strongly in support of the single desk, and the former farmer directors continue to pursue court action to have it restored, there is no doubt that this is a new era in western Canadian agriculture.

These are well-discussed points, but it’s important to note that farms are significantly larger, with complex business plans. Furthermore, farmers no longer just grow wheat and barley. They have diversified and learned to market canola, peas, lentils, canaryseed and many other crops.

But for those who continue to need or appreciate the expertise of CWB, it’s still there, even if the single desk is not. Farmers and the government should give it time to find itself in the new environment.

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