Will Farmers Support Voluntary CWB Canola Marketing?

Western farmers will soon be asked whether they’d like the option to voluntarily market canola through the Canadian Wheat Board (CWB).

A survey will be distributed via farm newspapers and the Internet this month or early next month, Manitoba Canola Growers Association (MCGA) director Butch Harder told about 70 farmers here March 15 at the District 10 CWB directors’ meeting.

“If there’s not enough support for the program the canola growers wouldn’t pursue it any further,” Harder told the meeting after Somerset-area farmer Norbert Van Deynze asked for an update on the canola-marketing proposal.

If there is support, the CWB would consider a three-year canola- marketing pilot project.

MCGA members passed a resolution at their annual meeting in 2006 asking the MCGA’s board of directors to explore marketing alternatives for canola. Record production in 2005 had depressed canola prices, while crush margins were high.

When the MCGA first met with CWB officials in 2006 they said the CWB’s ability to extract premiums in certain markets comes from its single-desk marketing authority.

CWB officials also said farmers would have to demonstrate their support for the option for it to proceed.

The proposal appeared dead until late 2008 when talks resumed between the CWB and MCGA.

MARKETING STUDY

In 2009 the CWB did a study on marketing canola. The report was never made public, but presumably the CWB identified potential benefits for canola farmers.

“We don’t know if there is enough value to be of interest to canola growers,” CWB spokeswoman Maureen Fitzhenry said in an interview late last year. “It’s them that would have to decide whether the value we think we could provide is enough.

“If farmers want us to try and do something we want to try and see what we can do for them.”

Harder said a lot of farmers believe if the CWB was a marketing option there would be benefits such as price pooling, making it more viable to ship canola in producer cars and perhaps an “Act of God” clause on contracted canola.

(There’s debate over how well pooling would work in an open market.)

WORK TERMINALS

The CWB might also be able to work with farmer and independently owned inland grain terminals.

Somerset-area farmer Bill Acheson said most of the companies buying and exporting canola also operate canolacrushing plants. It’s in crushers’ interest to pay a lower price for canola if they can.

“If we had an independent body selling canola in some situations it could be better because they’d sell to the highest market,” he said.

Harder stressed the proposal for voluntarily marketing canola through the CWB comes from the MCGA and not the CWB.

“I want to be very clear that the (wheat) board has not pushed this,” he said. “It has been coming from the bottom up from the canola growers in Manitoba mainly.

Both CWB supporters and critics have reasons to oppose the idea. If the CWB succeeds it bolsters the critics’ contention that the CWB can function without single-desk marketing powers.

CRITICS

On the other hand, the CWB’s critics fear anything that makes the CWB more popular with farmers makes it harder to remove its single-desk powers.

Although there are big differences in canola and wheat markets, presumably having the CWB as a canola-marketing option would provide insight into the pros and cons of a so-called dual market. If the experiment shows there’s little or no benefit the results come without having destroyed the single desk for wheat and barley. Under the North American Free Trade Agreement it’s impractical to restore the CWB’s monopoly marketing authority once removed. [email protected]

About the author

Reporter

Allan Dawson

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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