The prospect of a deficit in the Canadian Wheat Board’s 2002-03 pool accounts has the Western Barley Growers Association up in arms.
The association has sent an open letter to CWB chair Ken Ritter criticizing the agency’s marketing abilities and accusing the board of directors of failing to properly oversee the board’s sales.
“It is clear by the lack of supervision of management that the CWB board of directors did not give priority to farmers’ business of selling wheat and barley,” barley growers president Albert Wagner said in the Aug. 27 letter.
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He called on the board’s directors to hold management accountable for the “failure” of the 2002-03 sales program.
Board spokesperson Rheal Cenerini said the agency will take some time to respond to the barley association’s letter in detail, but added the agency rejects any suggestion that directors don’t care about the returns farmers get from board sales.
“The kinds of dollars the CWB gets for farmers is their primary concern,” he said. “Why else would they be here?”
While the final accounting for the 2002-03 crop year has not been completed, the board’s latest pool return outlook puts the total payment for wheat at the same level as the initial payment.
If that holds true, it means there will be no final payment and the federal government will be called upon to subsidize the pool account.
In its letter, the association also says there will be a deficit in the barley accounts, although the pool return outlook doesn’t support that.
The July PRO for feed barley was $158 a tonne, compared with the initial payment of $150, while for designated barley, the spread between the PRO and the initial was even greater, at $33 a tonne for special select two-row and $34 a tonne for special select six-row. That should leave plenty of room for final payments.
The association charged that the board “pulled out of the market” when prices were high in the fall and early winter of 2002 and did not re-enter until prices were falling.
Even with low world stocks and a small crop in Western Canada, said the letter, farmers end up with subsidized initial payments and carryover inventories equivalent to normal production years.
The association asked the board to answer several questions:
- What will it do to hold management accountable for the 2002-03 results?
- How much money did farmers lose because of the board’s sales strategy?
- How much money will the federal government have to spend to subsidize the 2002-03 accounts?
- What will the board do to ensure the situation doesn’t happen again?
Cenerini said the board disagrees with many of the points made by the barley growers.
“I can say that in terms of our performance in 2002-03, we don’t view it as a failure,” said Cenerini. “We acted reasonably given the information that was available to us and we have been pretty forthright in expressing that.”
The board has said unexpected developments in world wheat markets in the fall of 2002, along with the sudden rise in the value of the Canadian dollar, were the main reasons for the way the pool account turned out.
But because the letter raises a number of important and complex questions, the board wanted time to prepare answers.
“We’d like to go over the letter, pen a response and then formally release that,” he said.
