A heated debate over the value of the Canadian Wheat Board’s new malting barley marketing program CashPlus has garnered lots of attention from the farming public in recent weeks.
The board says the program’s guaranteed minimum cash price, transparent pricing and prospect of year-end premiums offers farmers a valuable new marketing tool.
Maltsters, grain companies, pro-open market farm groups and the federal government, say it’s a complicated and confusing program that won’t work.
At a meeting in Ottawa they rejected CashPlus and told the board to come up with a plan to move toward “barley marketing freedom.”
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Prairie farmers attending meetings about CashPlus have been interested in finding out how the program works and whether it would benefit their farms.
The debate about CashPlus has also been going on behind closed doors among the CWB’s board of directors.
The board issued a statement last week saying it will proceed with CashPlus, a decision that reflects the view of the majority of directors.
But it’s no secret that support for CashPlus is not unanimous among the board’s 15 directors, a group that includes at least six open market supporters.
That division of opinion was illustrated in comments made last week by two directors on opposites of the schism over barley marketing.
Jim Chatenay of Red Deer opposes CashPlus and says he’s simply reflecting the views of his constituents.
“The people I talk to, who I think are pretty astute barley people, tell me CashPlus is a non-starter,” he said.
CashPlus is “a good step in the right direction”, he said, but it’s not going to satisfy farmers who want complete marketing freedom.
“It’s a small bandage on a big wound, and I don’t think the bandage is sufficient.”
On the other side is Kyle Korneychuk of Pelly, Sask., who says while it took a while to figure the program out, he eventually came to the conclusion it’s a good option for farmers.
“It meets all the requirements of the so-called industry and it meets the requirements of a daily cash price that some farmers want,” he said.
“But it also establishes a base to ensure the wheat board is getting the highest price possible for farmers.”
Korneychuk said a key selling point is that revenue in excess of the original contracted prices will be returned to contract holders at the end of the marketing year, something that doesn’t happen with open market grains like canola or pulses.
Chatenay acknowledged the board has made an effort to improve services to farmers, including new pricing options, but it has introduced 19 new programs, including CashPlus, and that illustrates the difficulties the board is having meeting demands for more choice within a single desk system.
“It’s just too complicated and too complex,” said Chatenay.
It costs farmers a lot of time and money for the board to develop these programs, he said, with staff time coming up with proposals, focus groups with farmers, pilot projects and lengthy discussions at board meetings.
It’s not worth all that effort, he said, and it would make more sense for the agency to step away from barley marketing and concentrate its energies on marketing wheat and durum, where it does a much better job.
“It’s a losing battle to try to develop a barley program,” he said.
“It’s too complicated and it’s too little, too late.”
However, Korneychuk said at the very least, maltsters and other buyers should offer CashPlus to farmers and let them decide whether they like it.
“Today under CashPlus, there would be a guaranteed price of $6.40 a bushel for two-row malt in west central Saskatchewan,” he said last week. “What farmer wouldn’t sign up?”
An open market wouldn’t provide a similar price, he said, because buyers would simply have to offer a 30 or 40 cent a bushel premium over feed.
Korneychuk said maltsters and grain companies oppose CashPlus so they can make more money from the market rather than farmers.
He said the government and open market supporters are afraid CashPlus will be embraced by farmers and reduce pressure to take barley away from the board.
