The Canadian malting industry has turned thumbs down on the Canadian Wheat Board’s plan to introduce a cash market for malting barley.
While the board hasn’t released all the details of its proposal, it wants to unveil its new program, to be called CashPlus, in January.
It would offer farmers the choice of taking a cash-price contract for their malting barley, or selling it through the board for a pooled price.
The marketing agency said that will provide farmers with more flexibility and market-driven price signals.
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The board had hoped to release details of the plan before Christmas but cancelled a planned news conference at the last minute.
Last week the Malting Industry Association of Canada issued a statement saying it has informed the board that after four months of discussion, it is still not happy with the proposed contracting system.
“We’re not satisfied with the program at all,” said association president Phil de Kemp. “It’s complicated, confusing and expensive.”
He said the board’s plan limits the price going back to farmers and so does not provide clear, accurate and fully transparent price signals to them.
“It’s a version of cash trading but it still leaves too much money in the pool and not enough transparency,” he said.
A CWB spokesperson declined to comment on the maltsters’ statement, saying the agency will continue discussions with the association in an attempt to come up with a plan all can support.
She said the board won’t release the full details of its plan until that has been sorted out, adding no deadline has been set for a decision.
In an earlier interview, board chief operating officer Ward Weisensel said he believes the CashPlus program should satisfy demands from open market advocates for more choice and flexibility.
“We feel it provides what an open market provides, which is the opportunity to take a cash price that is guaranteed,” he said.
The CashPlus program will involve three separate transactions:
- The CWB negotiates sales directly with buyers.
- The board sets a cash price based on market conditions.
- Maltsters and farmers then directly negotiate contracts among themselves.
Farmers will indicate on their malting barley contract whether they will participate in the CashPlus program or the pool.
If market conditions result in a surplus in the CashPlus program at the end of the marketing year, those funds will be distributed among contract holders.
De Kemp repeated the malting association’s call for the federal government to introduce legislation providing for an open market for barley as of Aug. 1, 2008.
