The Canadian Wheat Board is vastly expanding the available pool of investors for new generation co-ops.
“A farmer in Lethbridge, Alta., could be an investor of a new generation co-op in southern Saskatchewan under this plan,” said wheat board chair Ken Ritter.
“If the farmer is obliged to deliver 30 tonnes against his NGC shares, he or she could deliver that wheat to the elevator in Lethbridge and the CWB would record that as delivery against the shares held in the co-op. The NGC processor, in turn, would source the same volume and quality of grain from the local area.”
Read Also
VIDEO: Potato video highlights importance of water conservation
Potato Growers of Alberta release the third of a five-part video series, highlighting the potato industry’s efficient use of water to tend to their acres producing the high-value crop during drought conditions.
CWB director Larry Hill said the new “stock-switching” policy makes a plant “completely location neutral” to a producer. All prairie farmers, regardless of where they farm in Western Canada, can participate in any new generation co-op.
It increases the number of potential investors in NGCs from those living reasonably close to the plant to the more than 100,000 farmers who hold CWB permit books.
“You’ve just got a better chance of finding investors,” said Hill.
The stock switching concept expands the board’s new generation co-op policy announced in July. That
policy wasn’t well received by Prairie Pasta Producers, a group of farmers exploring the feasibility of building or buying a pasta plant on the Prairies. The group felt the board’s policy discouraged investment in NGCs.
Representatives from Prairie Pasta and the wheat board met on Sept. 3 to discuss ways to change that policy to better meet the needs of NGCs.
“It’s some movement in what we asked for,” said Prairie Pasta chair David Schnell.
But the stock-switching plan doesn’t address one of the group’s main concerns.
Under the board’s policy, NGCs must buy grain from the CWB at the domestic human consumption price, a Minneapolis price backed off to where the plant is located.
If at the end of the year the DHC price is higher than what a farmer-member gets for delivering his grain to the board, Prairie Pasta wants the board to return that spread. If the DHC price were lower than the producer’s final payment, the plant would pay the board the difference.
That’s not going to happen, said Hill. The board’s NGC policy has to be fair to all producers delivering to the pool accounts and has to apply to wheat and
barley.
“There are political problems with the spread issue, but they become much greater with other grains than durum.”
The two groups will meet in Regina on Oct. 27 to work out the details for the stock-switching plan and discuss how it affects Prairie Pasta. Hill said the board of directors is satisfied with the revised NGC policy, but he left the door open for further revisions.
“I don’t think we’d ever consider any policy finished. If there’s a good idea that comes forward we’ll consider it.”
