Two lawsuits launched over impending changes to barley marketing have only muddied the waters for producers, said a Winnipeg marketing consultant.
John De Pape, speaking at a meeting organized by the Western Barley Growers Association (WBGA) during the Western Canada Farm Progress Show in Regina, said the uncertainty is costing producers money.
“I think that in terms of pitfalls for producers, (they are) the confusion, not knowing what to do and how to respond to those signals. I think that’s the injustice here,” he told reporters after the seminar.
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De Pape said the government’s intentions were clear, the plebiscite results that led to the plan to remove the Canadian Wheat Board’s monopoly on export barley Aug. 1 were clear and the minister of agriculture has been clear on how he planned to deal with the issue.
The Friends of the Canadian Wheat Board launched the first legal action June 13. The board itself then said June 18 it would challenge the removal of barley, alleging the government had contravened the Canadian Wheat Board Act.
Jeff Nielsen, president of the WBGA, said the lawsuits have frustrated farmers.
“There’s a lot of grain companies who are pricing into the fall, into November, December, January at very good prices. Now they’re going to have to eat that cost if the prices do drop,” said the farmer from Olds, Alta.
Prices have risen significantly since federal agriculture minister Chuck Strahl announced there would be market choice for barley producers.
However, both De Pape and Nielsen agreed that spike is due to other factors such as the drought in Ukraine, and not the announcement itself.
De Pape said his contacts were happy to hear the announcement but now “the brakes are on. They’re not very happy to hear that now there’s more issues to deal with.”
He said producers will have a price advantage in an open market because competition will push costs out of the system.
De Pape added producers should take a look at the companies that are offering good prices right now, but they should also be sure to know the contract terms.
Developing good relationships with buyers, negotiating specific terms and treating malting barley like other non-board crops when marketing are key. The contracts will have to have teeth, De Pape said, and there may be a period of give and take until the industry gets used to the process.
Stewart Wells, president of the National Farmers Union and a spokesperson for Friends of the Canadian Wheat Board, said he has signed many individual contracts with companies.
The contracts aren’t worth the paper they’re written on, he said, if producers aren’t willing to sue when companies unilaterally change the contract or don’t accept delivery. The companies always have more money and resources, he said.
Wells also pinned the confusion and uncertainty on the federal government.
“For months and months and months farmers and farm organizations have been urging the federal government to put their changes in front of a judge before they make the changes.”
That would have eliminated any possibility of market disruption, he said.
Nielsen added that the focus of the debate must return to barley and not the wheat board itself.
