Farmers need not be told wheat initial payments come nowhere near reflecting the current value of their crop.
Nor does the Canadian Wheat Board, which asked the federal government more than a month ago to increase those initial payments.
Despite the huge price discrepancy, and the board’s request, the federal government has yet to act on the board’s recommendation.
A spokesperson for CWB minister Gerry Ritz said last week federal officials are still analyzing the board’s request, adding he couldn’t specify a date by which a decision will be made.
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“I can say the minister has discussed the issue with the wheat board and is personally working to resolve this,” said the spokesperson.
The initial payment for 1 CWRS 13.5 percent protein is $153.70 per tonne or $4.18 a bushel (basis export position).
The latest Pool Return Outlook projects a final 2007-08 price of $258 per tonne or $7.02 a bu.
In other words, the initial price represents just 59 percent of the projected return for the year. Traditionally initial payments have been set at around 70 percent of the expected final price.
Meanwhile, the nearby futures price on the Minneapolis Grain Exchange last week for high protein spring wheat was $303.87 Cdn per tonne, or $8.27 a bu.
Not listening
National Farmers Union president Stewart Wells said the government should move immediately to raise its initial payment guarantee so the board can issue an adjustment.
“It is apparent the government is not listening to the advice it is getting from the CWB regarding initial prices and adjustments,” he said.
He added it’s important farmers understand that the federal government, not the CWB, is responsible for setting initial payments, and urged farmers to contact their MPs or Ritz.
Cherilyn Jolly-Nagel, president of the Western Canadian Wheat Growers Association, also wants initial payments to be increased as quickly as possible.
“I’ve seen the prices that are out there and I’d certainly be supportive of that,” she said. “I don’t think there’s anything to stop them from acting quickly on this.”
She added her first choice would be for farmers to be allowed to sell directly into the open market for current cash prices.
The board announced its intention to ask Ottawa for an increase immediately after initial payments were announced Aug. 3, and submitted its formal request on Aug. 15.
CWB spokesperson Maureen Fitzhenry said the situation lends support to a request submitted by the board to the federal government last year that it be allowed to take over responsibility for adjustment and interim payments, backstopped by a contingency fund provided by the government and farmers.
Such an arrangement would enable the board to get cash out to farmers more quickly than is now the case.
“This year is an extreme example of the disconnect there can be between the initial and the expected final return because of how sharply the wheat market has increased,” she said.
“Farmers need to know we are aware of how out of whack that is.”
She added the board has not received a response to its proposal, adding other issues seem to have pushed it to the back burner.
Wells questioned whether the federal government’s antipathy toward the CWB might be behind the time it takes to respond, in the hope it might make farmers angry at the marketing agency.
“I’m not suggesting that’s what’s happening, but I wouldn’t rule it out given the incredibly hostile behaviour of this government towards the board over the past 12 months,” he said.
Jolly-Nagel said she can’t imagine the government would deliberately delay getting much-needed cash to farmers just to score political points.
