Delegates to the United Grain Growers annual meeting last week approved their usual resolution demanding an end to the Canadian Wheat Board marketing monopoly.
They repeated well-worn arguments about how government regulations are a drag on entrepreneurial free spirits.
They even went through the motions of demanding that arch Liberal enemy number one Ralph Goodale lose his job as federal minister for the wheat board.
But those were just the public displays of political frustration, the latest shots in a long political battle waged by UGG against the regulated system that the pioneer founders of the company helped create half a century ago.
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The UGG developments that will have a far more profound effect on the outcome of the marketing debate came more subtly, elsewhere in the meeting.
The first was the simple assumption by UGG farmers that victory in the fight against wheat board controls is inevitable.
While the political battle goes on, they are beginning to plan their investment decisions around the presumption of an open north-south border.
In fact, all the prairie grain companies are beginning to make plans which will help “position” them well when the day dawns that the export monopoly is broken.
As partisans in the Crow debate of the 1980s will recall, when the inevitability of change becomes conventional wisdom, and the debate becomes “when” not “if,” the battle for the status quo is lost.
The second development that will have more impact on the marketing debate than any political resolution was the unveiling of the new relationship with the American-based multinational giant Archer Daniels Midland Co. of Decatur, Ill. For $81 million (U.S.), ADM purchased 45 percent of UGG and what many believe is effective control.
The American company has just two members on the UGG board, but it holds half the seats and an effective veto on the grain operations committee which will plot and review UGG business decisions in the grains sector.
No one said it publicly, but the UGG-ADM “alliance” will become a powerful new pressure point on CWB controls over export of grain and domestic sale of wheat to flour mills.
ADM senior vice-president Martin Andreas said the wheat board was not a factor in the company decision to invest in UGG. Yet he matter-of-factly said one of the advantages of the investment will be that ADM can move UGG grain into the U.S. if the company needs it for its network of mills and processing plants.
That, of course, will require dealing with the wheat board and it will not be long before ADM and UGG members use this government interference in the internal workings of a company to complain that wheat board border controls are illogical in the borderless world of investment.
In fact, last week a UGG delegate complained that if he is selling grain to a flour mill affiliated with his company, he should be able to do it directly.
The ADM-UGG connection will add a powerful commercial punch to the company’s political campaign.
