The federal government should pay for farmers’ financial losses caused by the changeover from a single desk to an open market system for barley, says the Canadian Wheat Board.
“We need to ensure that farmers aren’t left holding the bag,” said Ward Weisensel, the board’s chief operating officer. “They shouldn’t lose money as a result of this.”
The federal government initiated the changes and is rushing them through for Aug. 1, and so it has the responsibility to ensure that farmers aren’t financially hurt in the process, he said.
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Officials at the grain marketing agency, along with some grain companies, maltsters, farm groups and politicians, are concerned that confusion and uncertainty over the transition could prevent some sales contracts from going ahead.
For example, if farmers decide to hold back malting barley deliveries until after Aug. 1, anticipating higher prices under an open market, the board could have difficulty getting product to meet its contractual commitments.
Any penalties incurred by the board would be paid by farmers through the pool accounts and that shouldn’t happen, say CWB officials.
Chair Ken Ritter said it’s common practice in developed countries that when major policy changes are implemented, the government takes steps to ensure those directly affected don’t suffer financial losses as a result.
He noted that a previous government did just that by paying out the Crow benefit when the freight rates were deregulated.
Ritter said the board has made its views known to agriculture minister Chuck Strahl but whether the government will agree remains to be seen.
“Anytime you ask the government for money, it’s a difficult task,” he said. “I can’t say he’s been convinced yet.”
Terry Pugh of the National Farmers Union said it’s the government’s responsibility to protect farmers’ financial security through any transition process.
“It’s not the wheat board’s fault that this is happening,” he said.
Jeff Nielsen, president of the Western Barley Growers Association, declined to comment on whether the government should cover losses suffered by farmers.
“I don’t know what to say about that,” he said, adding there isn’t enough information to have an opinion.
“There’s a lot of speculation about what might happen, but people don’t have the facts. It’s very frustrating and farmers are caught in the middle.”
He doesn’t expect producers will hold back deliveries of malting barley, given their need for cash flow and the premium prices available for malting barley.
