The Canadian Wheat Board wants more grain companies to pay producers for malt barley up front.
Since late June, the board has dangled financial incentives as encouragement, and two weeks ago a news release officially announced the program.
Board spokesperson Deanna Allen said a maximum incentive of $1.50 per tonne will be paid to companies that, by 1999-2000, pay for at least 80 percent of their total designated barley business at time of delivery.
She said about 25 percent of designated barley was paid up front last year.
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“Companies have been moving in this direction but not as quickly as farmers would have wanted them to.”
Allen said the two-year incentive program should encourage companies to invest in the equipment and training they need to continue paying on the driveway after the program has ended.
Several companies have already implemented “street malt” programs. Saskatchewan Wheat Pool offered it at five locations last crop year.
Perry Cochrane, senior merchandiser for malt barley at the pool, said response was excellent, but producers wanted to see it at more elevators.
This crop year, the pool added 31 locations, including two in Manitoba and one in Alberta.
Cochrane said the company is proceeding slowly in order to train staff properly. He thinks the incentive program will help all companies expand more quickly.
“The potential exists to add or to delete poor performers,” he said.
United Grain Growers announced the launch of its street malt program two weeks ago at more than 40 locations. Steve Goossen, malt barley merchant, said this type of program is necessary in doing business today.
“It takes out the mystery if the car is going to unload or not unload,” he said. “For those that do not unload, the costs are very high. The onus is passed on to the grain companies.”
Goossen said UGG has limited its program because, “we want to walk before we run.”
He said the wheat board program will cover some of the equipment and training costs.
“It’s basically revenue neutral,” he said.
At Pioneer Grain, Kent Magarrell, assistant vice-president of corporate affairs, said the malt barley business is very competitive and farmers will be paying attention to street programs offered by different companies.
He said the ability of the board to pay carrying charges makes a lot of sense.
