Maximizing farmer returns and increasing farmer cont rol are priorities for the Canadian Wheat Board’s new chair Allen Oberg.
The District 5 director who produces crops and cattle near Forestburg, southeast of Edmonton, was elected the CWB’s chair last week during the board’s regulator monthly meeting.
Oberg, who was first elected to the CWB in 2002 and supports single-desk marketing, replaces Larry Hill, a Swift Current-area farmer and director whose term ends this fall and therefore can’t run for re-election.
“We’re entering a period where commodity prices are not where we like to see them, so we’re going to do everything possible to maximize returns to farmers both on the price side and on the volume side as well and have a hard look at our administration costs and shave those and keep them as tight as possible,” Oberg said in an interview June 4.
CWB administrative costs of $79.1 million were up $3.4 million or four per cent in the 2008-09 crop year compared to the year previous. That translated into 8.9 cents per bushel of wheat.
The federal government changed the CWB’s governance in 1998, ostensibly turning over control to a 15-member board of directors, 10 of whom are farmers, elected by farmers, along with five appointed by Ottawa.
However, the courts ruled under Section 18(1) of the CWB Act the governor-in-council (cabinet) can issue directions “with respect to the manner in which any of its (CWB) operations, powers and duties… shall be conducted, exercised or performed.”
Oberg said he wants the CWB to be “truly farmer controlled and farmer driven.”
Polls the CWB conducts semiannually show the majority of farmers, no matter whether they support the CWB’s current single-desk marketing powers or an open market, want to decide the CWB’s mandate.
Oberg said the CWB’s board will continue to invest in areas that will benefit farmers over the long term, such as pushing for a review of railway costs. The CWB believes the railways are overcharging western farmers by at least $100 million a year.
“There’s some serious money out there,” Oberg said. “If we could ever achieve that (a reduction in shipping costs), that would be one of the quickest ways to bring dollars back to the Prairie economy.”
Canada’s railways can charge whatever they want to haul western grain, but their total revenue from grain is capped.
The problem, according to the CWB is, while the cap is adjusted annually to cover changes (usually increases) in railway costs for things like labour and fuel, increased railway productivity is not regularly reviewed.
Oberg said he’s committed to making the CWB flexible, including options that mimic an open market, so long as they don’t undermine the effectiveness of the single desk or government guarantees.
According to Oberg, who along with the other directors can review CWB sales, the CWB earns more than would be the case in an open market. But the single desk and the CWB are greater than the sum of their parts, he added.
“I believe this organization has just scratched the surface on the things that it can do for farmers,” Oberg said. “I see the wheat board being a great leveller for farmers, not only being an effective marketer but being a real advocate and ally when it comes to representing their interests.”
As the only exporter of western Canadian wheat the CWB can invest in market development and branding knowing all the benefits will flow back to farmers, not a competitor.
In an open market, he said, the CWB would go the way of the Australian Wheat Board and Ontario Wheat Producers’ Market Board – one of many sellers and lacking in marketing and advocacy clout. [email protected]