Canada’s maltsters want an open market for barley.
The Malting Industry Association of Canada has called on the government to immediately introduce legislation to deregulate the barley market as of Aug. 1, 2008.
The industry has not previously taken a public stance on the marketing debate.
Association president Phil de Kemp said the decision is based on operational concerns and responding to customer needs, not politics.
“It’s not a question of wanting to get away from the board for the sake of getting away from the board,” he said.
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“It’s about giving farmers the ability to do what they want and about our ability to manage our assets and provide price signals and transparency on a daily basis, which can’t be done in a pooling system.”
Over the past three months, the maltsters and the board have been talking about making changes to meet the maltsters’ concerns while retaining the single desk.
De Kemp said while the board has yet to put forward a detailed proposal, it became clear to the maltsters that the differences between the two sides couldn’t be bridged.
That, combined with the desire of many farmers to deal directly with malting companies, and the fact that contracts for 2008 are already coming out, convinced the industry to ask for an open market.
Gord Flaten, the board’s director of sales and marketing, said he was disappointed but not surprised at the maltsters’ announcement.
He said the board approached the maltsters this fall with a plan that involved cash buying from farmers and plans to continue discussions with the industry.
“We realize we need to examine closely other options like cash buying,” Flaten said.
“We’ll keep trying to work through all the details of our program and narrow the gap between us.”
He acknowledged there are difficult issues surrounding the operation of a pooling system for malting barley next to a hot domestic open market for feed barley.
But he said the board has some “good ideas” on how to solve those operational issues within the context of the single desk.
The fundamental disagreement, Flaten said, is over the price the maltsters pay farmers for their barley.
The maltsters’ announcement was welcomed by pro-open market groups including the Western Barley Growers Association and Western Canadian Wheat Growers Association.
Barley growers president Jeff Nielsen said it’s important that the malting industry and farmers develop a close direct relationship, with secure contracts, price transparency and reliable market signals.
He said even though there are two malting companies not far from his farm at Olds, Alta., he gets better prices and contracts with livestock feeders.
National Farmers Union president Stewart Wells said there’s only one reason for the maltsters’ position.
“They’re out for the money,” he said.
“The corporate nature of the grain companies and malting companies means they are motivated solely by their own monetary self-interest.”
He said numerous studies and analyses have demonstrated that farmers receive premium prices for their malting barley as a result of the marketing power they gain from a single desk.
