SASKATOON – Farmers with $100 to spare can now invest in a scheme aimed at boosting world wheat prices to $10 a bushel.
At a series of meetings across Sask-atchewan this month, farmers are being offered the chance to buy a $100 contract from Farm Corp Marketing International.
The two-year contract gives Farm Corp the authority to negotiate wheat prices on behalf of farmers who sign up, and if necessary conduct a vote among producers on whether to hold wheat off the market.
The ultimate goal of the Saskatoon-based company is to put some 70 million tonnes of wheat under contract from around the world, and then use the resulting bargaining power to achieve a floor price of $10 a bushel.
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The idea of farmers dictating the price of wheat to buyers may seem far-fetched at first glance, but Farm Corp president Rick Pender says there’s no reason it can’t be done.
“It is as achievable as farmers want it to be,” the Meath Park, Sask., farmer told a press conference last week.
He said Farm Corp would start negotiating with marketing agencies and grain buyers once it has a “critical mass” of tonnage under contract, a position he hopes to reach by spring 2002.
Some industry analysts have dismissed the proposal as unworkable, saying the world grain market is too complex and diverse, with too many powerful players, to be controlled by farmers.
However, the plan seems to have struck a chord with some cash-starved farmers frustrated by years of low grain prices. In just a few months, Farm Corp raised $200,000 in seed money from farmers who bought shares after attending information and investment meetings.
International interest
Pender says he has discussed the plan with farmers, farm organizations and marketing agencies in the United States and Europe and is confident they will participate.
Low prices are a global problem, he said. Farmers around the world are realizing that for too long they have been price-takers, rather than price-makers, and they must now work together to change that.
“We’ve been taking it on the chin for 25 years,” he said. “That has to end.”
Pender announced the contract sign-up period the same day as the federal government unveiled its latest farm-aid package. But Pender said farmers know that government bailouts don’t provide a long-term solution to their financial problems.
An increase in the price of wheat to $10 shouldn’t have much impact on the price of wheat-based products, he said, adding that consumers had no trouble dealing with relatively high wheat prices in the mid 1990s and late 1970s.
Another organization called Focus on Sabbatical has also been promoting a plan to take grain land out of production to drive up prices. Participating farmers would be paid from an investment fund set up by the group.
Pender said there is one important difference between the two plans.
“Theirs is an idea. We are here now, ready to go,” he said. “It’s apples and oranges.”
The meetings began March 5 in Saskatoon and continue until March 15 in Prince Albert.
