A Saskatchewan farmer has a plan to raise grain prices and he’s hoping to convince the Canadian Wheat Board to sign on.
Renaud LaRochelle, who farms near Gravelbourg, says the board should simply refuse to sell any wheat or barley for less than it costs to grow it, plus a decent profit margin.
“This is our product and we have to say we’re not selling it for any less,” he said in an interview last week. “We have to take control.”
LaRochelle has talked to CWB directors about his plan and has been distributing flyers to local municipal offices in Saskatchewan encouraging farmers to do the same.
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“Most farmers I’ve talked to say, ‘who do we call about this?’ “
LaRochelle’s idea is simple and straightforward. The wheat board would calculate the cost of production for the various classes of wheat it sells, then add a capital cost allowance, a cost-of-living allowance and a 10 percent profit margin.
Using his farm as an example, he came up with a price of around $8.48 for 1 CW hard red spring wheat, $8.09 for 1 CW amber durum and $6.45 for standard select malting barley (all prices in-store Vancouver).
The board would sell only to customers willing to pay at least that price, which would likely include markets like the United States, Japan, the United Kingdom and Canadian millers.
LaRochelle said the main reason for low prices is that the board also sells large volumes of wheat for low prices to poor Third World coun-tries.
“The problem is that western farmers are subsidizing the Third World countries,” he said.
If the federal government decides Canadian wheat should be shipped to customers who can’t afford the minimum price, it should buy it from the board for the minimum price and then ship it as food aid.
“It should be paid for by Canadian taxpayers, not Canadian farmers.”
He said most farmers he has talked to say they’d be willing to carry more of their production over if they knew they’d get a higher price for what they do sell.
Ian McCreary, a CWB director from Bladworth, Sask., said the board and its farmer-directors agree prices are too low and are willing to listen to any ideas farmers have.
But he said this one wouldn’t work because other grain sellers would undercut the CWB’s minimum price.
“It would certainly make it easier for competitors to make sure you didn’t get much market share,” he said. “The volume we could sell would be fairly limited.”
LaRochelle said he thinks other farmers around the world would demand a similar minimum price and soon every one would fall in line.
But McCreary said there would always be farmers and grain merchants willing to sell below a voluntary minimum price.
As for the notion of the government buying grain at an artificially high price and then reselling it for less – not only is Ottawa unlikely to do that, said McCreary, but it would also run afoul of World Trade Organization rules.
The idea of the board selling less wheat and focusing on high-return markets is a legitimate issue, he said.
