While the federal government gives every indication it’s proceeding full steam ahead with plans to implement a dual market for wheat and barley, the Canadian Wheat Board has proposed a major revamping and expansion of its role, including retaining the single desk.
The board was set to release this week a 50-page report called Harvesting Opportunity.
An updated version of a report originally prepared in 2004 but never acted on by the previous Liberal government, it envisions a radically restructured CWB with a much bigger role in the prairie farm economy.
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The new-look board would consist of two facets.
The core business of grain marketing would be carried out by the CWB as a not-for-profit, non-share, farmer-controlled corporation.
The CWB would be parent to a new wholly owned for-profit subsidiary with authority to invest in everything from country and terminal grain handling and value-added processing to financial management services and manufacturing and distribution of farm inputs.
Profits generated by such investments would either be reinvested in other similar projects or paid back to the parent CWB for distribution to farmers.
The new organization would be funded by a $1.5 billion capitalization from the federal government, in return for the elimination of government guarantees on borrowing and initial payments.
The board says the proposed changes would strengthen the competitive position of western Canadian farmers in the global marketplace, secure premium markets at home and abroad and enable western Canadian farmers to compete with giant multinational grain companies.
“As the last farmer-controlled corporation in Western Canada, the CWB is committed to taking action to address the significant issues farmers are facing to secure their own success,” said the report.
“For farmers to successfully compete against large vertically integrated multinationals over the long term, their involvement in other aspects of the supply chain must be strengthened.”
The board’s proposal is likely to get a chilly reception from federal agriculture and CWB minister Chuck Strahl, who received an advance copy of the report.
Strahl has made it clear in recent weeks that the government is not interested in getting into discussions that are based on retaining the single desk.
“There’s no doubt about what the government’s position is,” the minister said after a closed door strategy session with dual market proponents in Saskatoon last week. “We’re moving towards a dual market as we promised.”
The report could exacerbate tensions between the board and the minister, who has held only two perfunctory meetings with senior CWB officials since taking office in February.
The report says the proposed new CWB business model would provide farmers with a number of benefits including:
- Retaining premiums arising from the single desk estimated at around $400 million annually.
- The opportunity to share in profits generated elsewhere in the grain industry supply chain.
- Improved access to premium grain markets through investment, partnership and joint ventures.
- Stronger negotiating positions vis-ˆ-vis other industry players.
- Providing assured demand for farmers’ products through value added investments and supply agreements.
- Reducing costs to farmers.
