Tensions appear to be mounting between a group of organic producers and the Canadian Wheat Board.
In the last few weeks the Organic Special Products Group, or OSPG, claiming to represent about 160 disenchanted organic producers, has issued News release
newscriticizing the board. A recent one accuses the CWB of hypocrisy.
Group spokesperson John Husband said the agency has repeatedly told organic growers their grain must remain under monopoly control for the benefit of the pool accounts.
But he contends the board markets grain outside the pools itself through its new basis payment and fixed price contracts.
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“Nothing goes into the pools and nothing comes out of the pools,” said Husband.
“My argument is it’s hypocritical of the wheat board to say to organic (producers), ‘We can’t let you out because of the pools,’ and yet they themselves are involved in sales that don’t make the pools.”
CWB organic marketing manager Donna Youngdahl said there is no hypocrisy because there are big differences between the two scenarios.
The board takes delivery of and sells the grain marketed through the contracts, which isn’t what the organic producers are proposing. As well, grain sold through the basis payment and fixed price contracts is hedged through futures markets, so there is no risk to prairie farmers.
“Is the producer directly in the pool? No. But there is no harm done to pool accounts by this sale,” said Youngdahl. She argued that wouldn’t be the case if organic wheat and barley were allowed to be marketed outside the board’s domain.
There are circumstances where organic growers would be competing directly with board grains, driving down the pooled price their fellow farmers receive, she said.
At present, organic demand exceeds supply, but there is no guarantee price premiums will always be there to dissuade organic sellers from tapping into conventional markets.
That could lead to an oversupply situation and bidding wars that would undercut conventional prices. Or the price for conventional grain could skyrocket as happened in the fall of 2002. If organic prices lagged behind, as they sometimes do, the organic producer may decide to make a quick buck by delivering directly to the CWB.
“We’d have a dual marketing type situation where the wheat board would receive a lot of grain when the prices were low and next to nothing when prices were high,” said Youngdahl.
Husband doesn’t buy those arguments.
“In the 13 or 14 years I’ve been involved in organic marketing, I’ve never seen organic markets below conventional,” said the Wawota, Sask., farmer.
“It just doesn’t happen. Not that I know of.”
Organic producers keep any premium they can achieve above the pooled price of their board grains.
In the unlikely circumstance where organic grain was sold into conventional markets, it wouldn’t have a distorting effect because it represents such a small amount of total wheat and barley production, said Husband.
According to the CWB, less than one percent of the wheat produced in Western Canada is organic.
Husband said the same rationalization used to keep organic grain in the pool could be applied to crops like Kamut wheat and certified seed that have been granted licences to be marketed outside the CWB’s monopoly.
Youngdahl countered that certified seed isn’t sold into human consumption markets and that ancient grains are not sold to mills, so they don’t pose the same kind of threat.
“That’s the main thing with organic is there is no visual distinguishability.”
