While western Canadian farmers ponder the possible demise of their single desk wheat agency, their counterparts in Quebec are experiencing the first year of life under a single desk marketing system.
Wheat growers in that province voted in the fall of 2004 to sell wheat destined for human consumption through a monopoly seller beginning with the 2005-06 marketing year.
Sixty-two percent of those who voted were in favour of the single desk, with 71 percent of the province’s roughly 800 wheat producers casting ballots.
The new single desk marketer, called the Federation des Producteurs de Cultures Commerciales du Quebec, or FPCCQ, has sold about two-thirds of the 2005 crop so far at prices in the range of $200 to $230 a tonne.
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That reflects a narrowing of the gap between the price paid for Quebec wheat and the price of western Canadian wheat by $7 or $8 a tonne, and that’s a result of the single desk, said the marketing agency’s general manager.
“It’s basic economics that you’re much better asking for a price at ADM or Robin Hood with one guy rather than eight or nine or 10 guys,” said Benoit Legault.
There is also more price transparency under single desk, he said, as the board makes a public accounting of its revenues and costs, something the private trade doesn’t do.
“Producers felt they didn’t have any references as to what should be the Quebec wheat price for milling wheat and that’s what we are offering them.”
Most of the wheat is sold directly to millers in the province, including small regional companies, with some going to Dover Mills in Nova Scotia. A small amount was exported to the United States through grain companies.
William Van Tassel, who grows wheat on his mixed farm near Hebertville, about 400 kilometres northeast of Montreal, is first vice-president of the FPCCQ.
He said farmers opted for a single desk because they didn’t think they were receiving a good deal under the open market.
There was a widespread view that a single desk seller would do a better job of segregating wheat according to quality, providing a more consistent product and getting the best possible price from processors.
Because volumes were relatively small, some grain merchants would dump all their wheat together, mixing milling and feed, which reduced the overall quality and eliminated possible premiums for farmers who produced top grades.
As a result, wheat acreage had been languishing in recent years, said Thierry Lariviere, who writes about the grain industry for the Quebec farm journal La Terre de Chez Nous.
“Producers were not happy with the situation because wheat is a good crop for their rotation,” he said. “They wanted to do more with wheat so they started to discuss this new board idea.”
Those discussions eventually led to the referendum that approved the single desk.
There have been operational and administrative start-up problems, including some lack of co-operation from grain dealers and buyers, but generally speaking things have gone well.
“We’ve definitely seen better prices this year,” Van Tassel said. “The difference between our wheat and western wheat has narrowed.”
However, the marketing year has not ended and with one-third of the crop yet to be sold, final prices are not available.
Ironically, Van Tassell is also vice-president of Grain Growers of Canada, an organization that favours ending the Canadian Wheat’s Board single desk authority and implementing an open market for wheat and barley.
He said he doesn’t see any point in trying to draw comparisons between the situation in Quebec and in Western Canada, although he acknowledges he has had some debates about single desk selling with his colleagues at GGC.
“I tell them that it’s a regional issue,” he said. “I say what you’re doing there in the West is your position and what we do here is our position. They’re not related.”
One of the objectives of the new marketing system is to encourage expansion of the wheat industry in Quebec.
“There is some hope that the market from smaller millers could grow, on the assumption there could be specialized demand for certain quality wheat, like french bread,” said Lariviere.
Wheat production in Quebec totalled 162,000 tonnes in 2005, well above the 10-year average of 116,000 tonnes. Out of that 162,000, about 60,000 was of varieties listed as eligible for human consumption.
It will also be important to develop a good relationship between the FPCCQ and the big milling companies in Montreal – Archer Daniels Midland and Robin Hood – which have traditionally discounted Quebec wheat relative to wheat from Western Canada.
