Organic grain buyers say the Canadian Wheat Board has taken a step forward by doing away with the cumbersome and expensive buyback program, but its new organic grain policy is still anti-competitive and unnecessary.
“We have to disclose everything about our business to our competitor,” said Tom Cowell, a buyer with Growers International Organic Sales Inc.
When the board ditched the buyback program in favour of the Organic Fixed Spread Contract for the 2007-08 crop year, it got rid of a lot of the uncertainty and cost associated with marketing organic grain.
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Cowell said the new policy is undoubtedly less financially punitive to organic producers, reducing marketing costs to an average of $3.38 to $3.71 per tonne from $25 to $30 per tonne under the old buyback system. He applauds the board for that move.
But the Organic Fixed Spread Contract comes with considerable baggage. Exporters are now required to disclose sensitive information to the board, which has been competing with other organic grain buyers since it got directly involved in the marketing of organic wheat, durum and barley in 2006-07.
Cowell doesn’t mind the extra competition, but he is exasperated that companies like his are forced to disclose to the CWB who they bought their grain from, how much they purchased, what country it is going to, whether it is being shipped by container, rail car or intermodel unit and what port of exit is being used.
“That’s a pretty nice advantage to give yourself,” he said.
“That’s like Pepsi telling Coke all their business.”
Patty Rosher, the CWB’s marketing manager for organics, said the people at the board who administer the Organic Fixed Spread Contract have been instructed to keep sensitive information about specific sales to themselves.
“I don’t see any detailed information on anything that comes in,” she said.
But that hasn’t quelled criticism.
Jason Freeman, sales manager for Farmer Direct Co-operative Ltd., wants the board to grant an exemption to organic grain similar to what has been given to niche grains like kamut and spelt.
He said the board is taxing innovative farmers who have done what it has failed to do, which is to deliver consistently higher prices to growers.
Freeman is perplexed that the CWB on its website says the new fixed price payment represents the benefits organic farmers receive from the board, such as branding, product and variety development and advocacy on policy issues.
He said the board extracted an extra $27 per tonne from organic farmers under the old buyback program for two decades and wonders if a refund will be coming.
Freeman said there is no need for the board to be directly or indirectly involved in marketing organics.
“They’ve cost us nothing but money over the past 20 years,” he said.
Rosher doesn’t know where this $27 per tonne number comes from since the buyback varied depending on when the grain was sold. In some cases farmers made money on the buyback.
She said the board was able to offer growers the enhanced and predictable Organic Fixed Spread Contract when it determined, through stronger certification requirements and the looming federal regulation, that organic grain would not be competing with conventional grain.
Cowell wonders why farmers are paying money for a crop that doesn’t compete with traditional board grains. In addition to the flat fee, he surmised it takes almost another full-time employee at Growers International to administer the paperwork, track balances and settle with the board. These additional costs are passed along to producers.
“The organic sector as a whole did not ask for this program; they asked for an exemption. That much is clear,” said Cowell, noting that at the board’s own consultation meetings the CWB acknowledged that 85 percent or more of the organic producers in attendance wanted a complete exemption.
Rosher said it is obvious why growers want an exemption. They believe going through the board adds cost to grain marketing. But an exemption isn’t in the cards.
“That would put us out of compliance with the Canadian Wheat Board Act,” she said.
