The proposed merger of Saskatchewan Wheat Pool and Agricore United drives home the need to maintain the single desk system, says the head of the Canadian Wheat Board.
“I think it is an additional argument for maintaining the single desk,” said Adrian Measner, the board’s president and chief executive officer. “We can do things to counterbalance the kind of market power the proposed company would have.”
The proposed new company would have a dominant market position in the countryside and at port position.
Measner said the board has been able to use its single desk power to ensure competition in the grain handling and transportation sector, by setting up programs that help smaller players compete.
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“Regardless of the size of the company or whether it owns terminals, we try to force competition at the primary elevator driveway,” he said, citing rail car allocation rules and limits on tendering.
Measner said a reduction in competition among grain handling companies would be bad news for farmers because they have to buy products and services from those firms.
The proposed merger would have even more serious implications for grain handing at port position, he said, noting that the new company would have an ownership or operational stake in all six major grain terminals at Vancouver, as well as the terminals at Prince Rupert.
National Farmers Union president Stewart Wells echoed Measner’s concerns about the proposed merger, saying a farmer-controlled CWB with single desk marketing power is the only source of market power for prairie grain farmers.
In announcing the proposed merger, Sask Pool chief executive officer Mayo Schmidt dismissed concerns about the effect of the proposed new company on competition at primary or terminal elevators.
He also rejected attempts to link the proposal to the debate over the future of the CWB and the single desk.
“We don’t see this as being part of the debate about marketing choice at all,” he said.
However, during a conference call, he said the new company could fill a role as the “Canadian champion” in the world marketplace.
“We can be the Canadian champion the CWB talks about,” he said, promoting and selling Canadian grain in competition with the big multinationals.
Measner said there’s no comparison between what the wheat board does and a private company, especially given that the new company would have a significant ownership stake held by foreign investors, including U.S.-based Archer Daniels Midland, which owns 23 percent of AU.
