Sell grain through CWB in this crop year and you’ll receive a $5 per tonne equity interest in the organization after privatization. Eventually, possibly and with no idea of what privatization will involve.
It’s very strange.
CWB called a news conference for Sept. 5 “to announce the first steps towards privatization.” The news conference was postponed with the promise of a new date to be an-nounced in the near future.
Instead of a news conference, the $5 per tonne equity offering quietly appeared on the CWB website. Not prominently on the website, mind you. Not in the news releases or announcements or anywhere to be found on the home page. Instead, you have to dig around in “About Us” to find it.
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And the information is sketchy at best.
“The plan is subject to successful privatization and the CWB receiving all required legal, regulatory and governmental approvals.”
There’s even a separate disclosure document that lists the reasons why there can be no assurance that the equity interest will ever materialize.
In fairness, CWB does say it believes the equity interest will have value. Why then would you just let information of the offering seep out? Why not trumpet it in the hopes of driving business to the CWB?
Of course, this methodology for farmer ownership will not be universally applauded. CWB assets should belong to all farmers who did business with the old wheat board. This equity offering applies only to farmers who do business this year and into the future.
The Marketing Freedom for Grain Farmers Act mandates that the CWB present a plan for privatization to government by 2016, to be implemented by 2017.
The CWB says it wants to fast-track privatization plans and intends to beat that deadline.
Information is not available on just how much business the CWB attracted last crop year, but it’s difficult to believe its share of grain sales will increase in this second post-monopoly year. Yes, CWB is doing some business in canola and peas in addition to wheat and durum, but farmer interest appears to be fading.
In year one, lots of producers marketed some of their grain through CWB just to hedge their bets in the new marketing environment. Expect less of that this year.
Maybe the fast-track to privatization is to act before the CWB becomes completely irrelevant.
Although not on the website, CWB officials have made it clear that they intend to buy a network of grain handling assets, with money likely coming from an industry partner or partners.
Will that truly provide value for producers? Is the CWB brand so strong internationally and the CWB’s employees so well-connected and bright that they can buy grain handling assets and successfully compete against the existing, long-established players in the industry?
What assets would be available for a privatized CWB? How could a smattering of grain handling facilities provide access for farmers in all parts of the Prairies? How much control would farmers have in the new organization?
It really comes down to the big overriding question: without its monopoly, does the CWB have a useful role to play? It has good people who are working hard, but most farmers are still waiting to be convinced.
Will the $5 per tonne in potential equity attract your business? The tentative nature of this offering doesn’t help to instil confidence in the overall privatization plan.
