Another round of Canadian Wheat Board director elections is over.
What can and should the board do now to make farmers’ lives better?
Putting aside the futile debate over the benefits of the monopoly vs. the open market, how can the practical grain marketing needs of thousands of prairie farmers be met?
The general answer is: keep improving Producer Payment Options to provide new solutions to farmers’ marketing challenges.
The recent Early Payment Option for feed wheat is an excellent example of the board cobbling together a special program for a specific problem this year. That program lets farmers lock in prices and sends more focused and accurate price signals to the feed grains market than the Pool Return Outlook was capable of doing. That helps the offshore and domestic market converge and gives farmers better choices. It’s far from a perfect program, but this is a far from perfect world.
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So why not more of that type of thing?
Hardliners on the left sometimes argue that PPOs are a distraction for the board, help relatively few farmers and aren’t worth the effort.
Hardliners on the right will be satisfied with nothing but a broken monopoly and really aren’t looking for anything to remove the pressure of frustration some producers feel with the board.
But for commercial grain growers living in the real world, new tools that give them better ways to get cash in their hands and provide better price signals are a good thing. Do any reasonable people disagree with this?
There is one challenge market analyst and marketing adviser Greg Kostal pointed out: too many options can be as bad as too few.
“Heck, even I have to constantly refer to the website to understand the what-ifs,” Kostal wrote in an e-mail he sent to me while doing a tour of farmer meetings.
There are “too many for the average farmer to understand.”
However, customized programs that are simple to understand but solve a crucial problem are still worth developing.
For instance, a feed wheat pricing program based on U.S. corn
futures would be simple and eliminate the need for elaborate discounting to milling wheat prices, Kostal said.
“(I) guess it’s finding that balance.”
Richard Phillips, executive director of the monopoly-unfriendly Grain Growers of Canada, told me he thinks the board should now tackle what his organization thinks is obvious: farmers want to be able to opt out of barley pooling and other CWB complications, somehow.
“The time for the board to take some proactive steps with barley is now,” said Phillips.
“I think they need to do something on barley. Farmers want marketing choice on barley. I think the wheat board would be well-advised to look at how could we truly represent that.”
No program will satisfy the people who hate the board’s monopoly on ideological grounds. And none will seem worth the effort to the folks who think farmers should be happy with pooling.
But there are going to be situations when something like this year’s feed wheat mountain suddenly appear, and the board needs to keep innovating solutions to those problems.
With the elections now in the rearview mirror, there’s time for renewed productive thought on what the board can do to bridge the divide between pooling and the free, cash market that might be ideologically wide, but practically jump-able.
