Suggestions by Canadian Wheat Board officials that the agency may get out of barley marketing if it loses its single desk powers triggered a volley of criticism from open market supporters last week.
Conservative MP David Anderson, parliamentary secretary for the CWB, said it’s “outrageous” that the board is suggesting that it might get out of the barley market.
“They were asked to come up with a plan months ago and have simply sat on their hands,” he said. “Now in the 11th hour they are trying to scare farmers about the future of marketing barley through the CWB.”
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At a long-term planning session in Winnipeg in early February, CWB directors debated whether the agency would be able to create value for farmers by selling barley in competition with other grain merchants, and if not, whether there would be any point staying in the barley market.
“The key question is ‘could we differentiate ourselves in the marketplace and add value for producers?’ ” said director Rod Flaman of Edenwold, Sask.
“And if you don’t add value for producers, is it worth diverting significant resources of the corporation to that effort?”
The board has instructed its staff to study the issue further.
But directors who support the single desk, which includes the majority of elected directors, are skeptical.
Director Bill Toews of Kane, Man., believes the wheat board could not continue to add value.
“I’ve heard no convincing argument that we could,” he said, adding that even the federal government’s grain marketing task force failed to come up with a credible plan.
However, the directors weren’t unanimous in that view.
Appointed CWB director Bruce Johnson, an open market supporter, acknowledged the agency would face challenges adjusting to an open market, and agreed it would have to provide a benefit to farmers to justify remaining in the market.
But he is not convinced that the board couldn’t provide that value.
The board has a lot going for it, he said, including extensive contacts and goodwill with customers, marketing expertise and the loyalty of many prairie farmers.
“The board has always maintained it is a capable marketer and I tend to believe that,” he said. “I think it would still be able to compete in some markets as it does now.”
Johnson said the government’s grain marketing task force, of which he was a member, never suggested immediately cutting the board loose in an open market. Rather, it recommended that the board have certain borrowing privileges, assets and the right to raise capital from farmers and the marketplace during a transition period.
Jeff Nielsen, president of the Western Barley Growers Association, said the board currently operates successfully alongside an open market for feed barley and expressed confidence the agency would have “no problem” remaining a viable marketing option in a fully open market.
Toews took issue with Anderson’s criticisms, including his dismissal of the board’s concerns as “nothing more than a thinly veiled threat that if they don’t get their way, they will take their ball and go home.”
“If he took the time to come to the board we could explain to him all the issues surrounding the board operating in an open market and see if he can find some value to farmers,” he said.
During the planning session, the directors identified difficult issues that would face the board operating in the open market, including that it would have to rely on competitors to handle CWB grain in the country and at port position, and how it would get sufficient capital.
Johnson said the board should be capable of reaching operating agreements with grain handling firms to move board grain.
