Bob Roehle will not listen in silence as farmers complain about the Canadian Wheat Board’s performance in managing market risk.
As a public voice of the board, he figures it’s his job to make sure that if farmers decide to dismantle the agency’s export monopoly, they do it with their eyes wide open.
It could cost them the benefits of price pooling.
Annual price pooling is paying farmers an average price over a selling period to help stabilize producer income, he said.
“What you have is a big sugar daddy called the federal government who’s underwriting operations of a $6 billion sales agency. What more do you need?”
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If farmers understood how the board worked and the value of pooling, they might not be as anxious to embrace forward pricing, Roehle said.
Misinformation is being used to sway farmers to support breaking away from the monopoly, he said.
And within the board, it is often difficult to understand the opponents’ point of view.
“There’s a feeling within the board that we’re on the side of angels and that if farmers could just understand the organization the way we see it, they’d understand.”
But Ken Stickland, an agricultural consultant with KenAgra Management Services in Edmonton, argues that attitude doesn’t give today’s grain producer enough credit.
A growing group of young to middle-aged farmers operate large acreages with intensive inputs and high debt loads, he said.
“They’ve got a lot of risk so they want to be able to lock in a price,” Stickland said. If the board wanted to, it could provide that service.
“If prices go higher, you don’t get it but if it goes lower, you gain. Either way, at least you can turn around and buy fertilizer and other inputs and know what you’ve got to work with.”
He said there is growing farmer skepticism about the board’s ability to manage market instability.
“We’ve had much higher volatility where people need forward pricing even more,” he said. Pooling is an inappropriate tool for a type of producer that could soon be the norm.
Many industry analysts agree the board must offer forward pricing options for at least some crops if it is to survive.
It won’t work for all grain, said University of Manitoba agricultural economist Daryl Kraft, but it might be a good way to calm the waters.
Feed wheat and barley would be the likely choice of grains that might do better outside the pool, he said.
“They represent such a small percentage of sales to the board, it’s possible both of those products would be better served through that type of risk management than the current pooling system.”
