Ottawa has stripped the administration of wheat, durum and barley cash advances from the Canadian Wheat Board and transferred it to the Canadian Canola Growers Association.
The change, announced Sept. 29, makes sense, District 10 wheat board director Bill Toews said in an interview.
Given the reluctance of the government to give any regulated access or capital assistance there s unlikely to be a voluntary wheat board, Toews said.
The government is taking clear and concise action so wheat, durum, and barley farmers have access to the Advance Payments Program without disruption, Agriculture Minister Gerry Ritz said in a release.
As of Oct. 1 the canola association started issuing cash advance applications on online ( www.ccga.ca) for the 2012 winter wheat crop. Farmers can phone the canola association at 1-866-745-2256.
Spring advances on wheat and barley for the 2012-13 crop year will also be issued by the association starting April 1, 2012.
The board will finish administering advances for the 2011- 12 production year only, which includes post-harvest cash advances this fall.
Ready to go
The association, which represents provincial canola grower associations from Ontario to British Columbia, has administered canola advances for 30 years, said association general manager Rick White. It does advances for 19 other crops too.
We re all set up and ready to go here, he said. We re looking forward to working with growers to offer them more commodities through CCGA to help them reduce their paper load. Hopefully they ll just need one application form from us and one administration fee and that will get rid of the duplication that s out there right now.
The association s previous cash advance program was almost as big as the wheat board s in terms of the number of farmers served and the amount of money advanced.
Under the cash advance program farmers can get loans against their crops and repay the money as they sell them.
Eligible farmers can be advanced up to $400,000, with the first $100,000 interest free.
The program, which began with just wheat board crops in 1957, was created to provide cash flow to farmers unable to deliver because of quota restrictions.
Advances on non-board crops came in the 1980s and allow farmers to store products rather than sell at depressed prices.
The wheat board will co-operate fully to ensure the transfer runs smoothly, Toews said.
While the canola growers association was geared up for the change, the board was informed just before the announcement, Toews said.
I think it s an example on the manner in which Mr. Ritz does his business, he said. He doesn t consult with the board and would probably cherish the idea of him being seen to be making his first step into an open market.
The Western Canadian Wheat Growers Association welcomed the move. The board can focus on competing for farmers grain in an open market, it said in a release.
National Farmers Union president Terry Boehm said it shows the government doesn t believe the board will survive in an open market.
The canola association, a not-for-profit agency, makes a small profit administering cash advances, White said. He declined to say how much, but said the money is used to improve the program.
Some of the earnings come from the spread between what the association pays to borrow money and how much interest it charges on advances of more than $100,000.
Farmers getting an advance through the association pay a $150 application processing fee, which covers all the advances being applied for. Three per cent of the advance money is withheld until the advance is repaid.
The wheat board has administered the cash advance program for wheat board crops since 1957, said board spokesperson Maureen Fitzhenry. Farmers pay a $100 fee to grain companies that work with the board. The board charges an additional $100 fee on advances of more than $100,000.
The CWB also makes a small profit administering advances. The money goes into the pool accounts.
The equivalent of 10 to 15 board staff have been administering the advance program. The board is still assessing the impact, Fitzhenry said when asked about layoffs.
For the time being, there will still be significant work for CWB staff in administering the current year s program and assisting in the transition, she said.
Meanwhile, White said the canola association is hiring new employees to handle the additional work.
Any (board) staff that s out there that might have experience and the right qualifications and would fit in I am certainly open to receiving resums, he said.