The Canadian Wheat Board is getting closer to bringing in a system to measure how good a job it’s doing selling grain.
The agency’s board of directors will consider giving the go-ahead to benchmarking at its next meeting in November.
But there are concerns the information could provide foreign critics with ammunition to use against the wheat board.
“There is a big balancing act between what is produced in benchmarking and what flags it will raise in terms of trade concerns,” said University of Saskatchewan economist Richard Gray, who was hired by the board earlier this year to devise a benchmarking system.
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If the benchmarking produced numbers proving the board’s monopoly status gives it an advantage in the marketplace, he said, that could theoretically be used by the board’s enemies to attack it in world trade talks.
Board officials declined to say whether the agency is concerned about how benchmarking might affect trade issues.
“I’d sooner not comment on that right now,” said director John Clair, who chairs the committee that has been looking into benchmarking.
Benchmarking is supposed to develop an objective mechanism to track and compare prices received by farmers in Canada and the United States.
Farmgate prices at a number of comparable locations on both sides of the border will be compared, along with selling prices at Canadian and U.S. ports and the costs of handling and shipping grain to export position.
Once a formula is adopted, the board will be able to plug in new numbers and track its performance.
The board will use the results to assess how well the monopoly works and how good a job the agency’s sales staff is doing in getting the highest return possible for farmers.
“Any board needs to know how well the organization is working and to me benchmarking is a huge part of it,” Clair said.
Gray met with the CWB’s directors at their regular board meeting in mid-October to discuss the final version of his report.
He said later the directors seemed to agree on the need for benchmarking as a way to assess staff performance.
“When you’re selling over $4 billion worth of product, you probably want to be able to measure how well you’re doing,” he said.
But he also said he came away with the clear impression that the trade issue was a concern.
When benchmarking was proposed, the board said the results would be made public so farmers could judge the agency’s performance for themselves.
Asked if concerns about trade might change that, Clair was non-committal, saying the agency has to strike a balance between being open with farmers and keeping sensitive commercial information confidential.
He wouldn’t venture a guess as to whether benchmarking would get a green light at this month’s board meeting.
Even if it was approved, he added, it would probably be January before the system was up and running.
Gray said feedback he received from producers during the past few months indicated that most think benchmarking is a good idea.
But he added that no matter what the numbers show, neither he nor the board expect it to end the political debate over the relative merits of single-desk selling versus the open market.
