Alberta Reform MP and Canadian Wheat Board critic Leon Benoit found himself on the defensive last week after saying board control has allowed elevator companies to rake in revenues risk-free.
“The elevator companies get a lot of their revenue with no risk through grain handled for the board,” the Vegreville MP said, as he questioned prairie wheat pool witnesses about the impact of proposed board reforms. “Elevation charges probably would be much, much lower if the board didn’t just happily, it seems, continue to pay elevation.”
What Benoit said he really wanted to say was that cattle feeders are worried that giving the wheat board the ability to pay cash for grain would destabilize feed grain markets “and prices could rise dramatically very quickly.”
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But representatives of Prairie Pools Inc., an umbrella group of the three prairie pools, jumped in quickly to argue against his assertion that the board has been a licence to print money for grain companies.
“You left the impression that handling grain is a bit of a golden cow,” said Manitoba Pool Elevators president Charlie Swanson. “I want to assure you it isn’t.”
He said grain companies are responsible for the capital costs of the handling system, for the quality of the grain once in storage and for losses that occur once the grain is delivered.
Ray Howe, vice-president of Saskatchewan Wheat Pool, also noted the Canadian Grain Commission, not the wheat board, sets elevation charges.
Benoit back-pedaled.
“I know that,” he said. “I fully understand the risk that elevator companies take and I appreciate all of that.”
The point he said he was trying to make was that wheat board marketing power has reduced competition and kept the elevator system inefficient. Benoit said he was not suggesting grain handling is risk-free for the companies.
“But that’s the insinuation you left with everyone else here,” said Howe.
On the issue of cattle feeders being nervous about wheat board cash purchases, Howe said it is not surprising. Another buyer in the market could increase prices.
“If I were buying and had to bid against somebody else, sure I’d think I could have got it cheaper if he hadn’t been bidding on it too,” said Howe.
