The Conservative government missed an opportunity to quickly put more cash into farmers’ pockets by setting initial payments too low, say a number of prairie farm leaders.
“Farmers need to realize as much money as possible as quickly as possible from that initial delivery to the elevator,” said Ken McBride, president of the Agricultural Producers Association of Saskatchewan.
He said the government should have followed the Canadian Wheat Board’s request that initials be set at 75 percent of the June pool return outlook.
Instead the government approved payments representing 69 percent of the PRO for wheat and 62 percent for durum.
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Compared to the July PRO, the initial payments represent 67 and 62 percent of the projected return for wheat and durum respectively.
“I’m certainly not happy with the initials,” said Western Canadian Wheat Growers Association president Cherilyn Jolly-Nagel, describing them as “very conservative numbers.”
But she added that even if the board’s recommendations were accepted, the initials wouldn’t have been higher.
She said it demonstrates the shortcomings of the current wheat marketing system and the need to give farmers more choice in selling their wheat and barley.
National Farmers Union president Stewart Wells said the government definitely missed a chance to get more money to farmers from the marketplace, adding he hopes farmers don’t blame the CWB for the low initials.
He also tied the payments into the debate over the future of the CWB, saying that given the current government’s ideological opposition to the board, he’s suspicious about why Ottawa ignored the board’s recommendations.
“I don’t know if the government is doing this deliberately to make the CWB look bad or make farmers unhappy with the board, but if you were trying to do that, this is how you’d do it,” he said, noting the government also took an inordinately long time to approve final payments on the A barley pool.
However, other farm leaders rejected that suggestion, noting that the previous Liberal government was also cautious in setting initial payments.
Dick Chorney, a farmer from East Selkirk, Man., said he thinks the government made the right decision, given the volatility of the world wheat market.
“It’s prudent fiscal management,” he said, adding that farmers now have plenty of opportunity to lock in higher prices through the board’s pricing options.
“I’ve presold for nearly $5 a bushel for my first deliveries under the fixed price contract,” he said.
Market analyst Mike Jubinville of ProFarmer Canada said that while farmers are right in thinking the initials are low relative to the current market outlook, the government is taking the right approach, given the disastrous consequences of going into deficit in the pool.
“It’s good to be a little conservative at first and once some sales are on the books respond relatively quickly with some adjustments to the initial,” he said.
He said that barring surprise developments, an adjustment could come before Christmas.
