SASKATOON (Staff) – A recently released study of Canadian Wheat Board selling prices provides a “substantial argument” in favor of the board marketing system, says federal agriculture minster Ralph Goodale.
The study by three prairie academics concluded that during the last 15 years, the board has been able to capture an average premium of $13.35 a tonne as a direct result of its status as the monopoly exporter of hard red spring wheat.
“It’s a pretty compelling piece of information,” Goodale said in an interview, adding he hadn’t had a chance to go through the study in detail.
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And he said the results of the study will be an important consideration as the government continues its review of the grain marketing system.
“There are obviously other factors that also need to be taken into account, but that hard arithmetic in the study is a very substantial argument.”
The study, commissioned by the board and carried out by agricultural economists Daryl Kraft, Hartley Furtan and Ed Tyrchniewicz, examined 20,000 sales contracts covering the period 1980-94. The board’s selling prices were compared with sales by other exporters.
In addition to the price premiums, the study found the board provided farmers with a net benefit of $5.53 a tonne in reduced marketing costs compared with open market sales, and said it does a good job responding to the changing needs of foreign buyers.
Goodale said the findings tend to confirm his generally favorable views about the wheat board marketing system.
Marketing advantage
“The system all in all provides farmers with a distinct marketing advantage that should not be taken for granted. What this study does is put hard numbers around the theory,” he said.
The agriculture minister said the fact that the board commissioned the study doesn’t detract from its conclusions, because the work was carried out by three respected academics.
Goodale also said he had no criticism of the board for spending $90,000 of farmers’ money to conduct the study, adding it’s important that this kind of information be made public while the review of the grain marketing system is under way.
“Let’s get it all on the table so that everybody can make an informed, reasoned, intelligent judgment and not base the debate on anecdotes or rumors or innuendo.”
