The Canadian Wheat Board says it’s living up to its commitment to move 25 percent of its export program through commercial tenders.
Nearly three months into the crop year, only about 39,000 tonnes of grain have been shipped under the new tendering system.
With the board expecting to export about 17 million tonnes of wheat, durum and barley this year, that 25 percent target works out to roughly four million tonnes.
That would seem to leave the board a long way to go to meet that commitment, which is set out in a memorandum of understanding between the board and the federal government.
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But board officials say the 25 percent should be a measure of the volume of business that is put out for tender, not how much of that business is actually accepted.
As this week began, the agency had issued tenders for more than 700,000 tonnes, which is on pace to meet the target.
“My interpretation is that we are complying with the 25 percent by putting the tenders out,” said Adrian Measner, the board’s executive vice-president for marketing. “We are offering and we are getting some successful bids, so I think we are on the road to living up to our end of the agreement.”
The MOU states the board “shall seek tenders, consider offers and award contracts through a public tendering process. Such contracts, in the aggregate, shall comprise: not less than 25 percent of the (CWB’s) total volume of business…”.
A spokesperson for the Western Grain Elevators Association, whose members have been refusing to bid on the board’s tenders, said his organization hasn’t talked about the issue with the board.
Ed Guest said that issue has the potential to be “very disruptive” as the two sides try to sort out their differences about the new transportation rules.
“Let’s say we agree it should be 25 percent tendered, not necessarily accepted,” he said. “Well shoot, then the board can tender with such terms that nobody will bid.”
Theoretically you could end up with a situation in which no grain moved under tender, Guest said, but the board could say it lived up to its commitment.
More possible
Measner said the board wants to make tendering work and is prepared to move more than 25 percent if the system is running smoothly.
He added the board would face serious operational and competitive difficulties if it found itself late in the crop year having to move huge volumes under tender to reach the 25 percent target.
He added the issue of whether the 25 percent applies to tenders or actual movement may have to be resolved between the board and the federal government.
Meanwhile, the board and the WGEA are meeting this week in the latest effort to work out an agreement on new rules for grain transportation, including the details of the tendering system.
Guest said the association would present a detailed proposal covering all aspects of the handling and transportation system, including both tendered and non-tendered movement.
He wouldn’t speculate as to whether the two sides are likely to resolve their differences at this week’s meetings.
“Like farmers, I’m eternally optimistic, but there’s that little reality check that comes in there too,” he said. “We’ll have to wait and see.”
