The Canadian Wheat Board will be down to one-quarter of its previous staff by the time it loses its monopoly Aug. 1, a downsizing critics call disappointing, but predictable.
But some are also questioning whether the board’s top five executives should continue to receive salaries and benefits totalling $2.3 million annually, including $807,000 in pay and benefits to board president Ian White, as the CWB’s grain handle and staff shrink to a fraction of their previous size.
The CWB has already cut 130 of its 430 employees and plans on cutting an additional 200. Whereas it once marketed around 19.5 million tonnes annually, its future volumes under a voluntary scenario might only be five million or six million tonnes.
Former elected board member Stewart Wells says the compensation paid to senior executives should be reviewed in that context.
Neither White nor Agriculture Minister Gerry Ritz were available to comment as of press time Monday.
However, board chair Bruce Johnson confirmed in an emailed response to questions that salary structures are under review.
“Like all other aspects of CWB operations, the salary structure — including that of senior management and the CEO — is being reviewed to ensure that it supports our objectives of profitability for the corporation and positioning for eventual privatization. Our board of directors will be setting compensation levels with these considerations in mind,” Johnson said.
“I think the wheat board itself, under this new legislation, recognizes its abilities and need is going to be reduced,” National Farmers Union president Terry Boehm said in an interview May 9.
“It isn’t going to be as effective without those employees. It was a very low-cost provider of these marketing services.”
According to Boehm the shrinking wheat board exposes Agriculture Minister Gerry Ritz’s promise of a “strong and viable” wheat board option in an open market, as a sham.
Wells, a Swift Current-area farmer, also condemns the government for using the board’s contingency fund to bankroll the new wheat board. He claims the money belongs to farmers.
“Without the grain delivered by the farmers to the wheat board there would be no contingency fund, period.”
The fund was set up to cover losses in future trading connected to providing farmers with non-pooled pricing options. The fund comes from trading profits.
The fund was capped at $60 million, but early last year board managers predicted the fund would exceed the cap, Wells said. The board repeatedly asked Ritz to increase the cap, but he refused. At its October 2011 meeting, with the books soon to be closed for that crop year, wheat board directors discussed distributing the surplus back to farmers, Wells said.
“Some of the wheat board managers became unglued,” he said.
They argued the fund should be used as seed money for the new wheat board, even though the government’s legislation to create an open market hadn’t even been tabled in Parliament yet.
The board passed a resolution to return the surplus money to farmers. Two working days later, Ritz raised the fund’s cap to $100 million. He also issued a directive preventing the board from touching the fund.
“Someone who was privy to that information at that board meeting was talking directly to the government,” Wells said.
The government tabled its Marketing Freedom for Grain Farmers Act Oct. 18. A few days later the contingency fund cap was doubled to $200 million, Wells said.
The federal government has promised to cover any board shortfalls for the next four years during the board’s transition to an open market. However, after that the board must be privatized or wound down.
For the new wheat board to survive it must be able to move grain to export. So far it has only struck deals with Cargill and South Western Terminal. Board spokeswoman Maureen Fitzhenry repeated again last week more agreements are coming.
According to one industry source some companies will only agree to handle pooled wheat board grain, not cash contracts that compete directly with them.
Fitzhenry said working with the board can increase a company’s grain handle and revenue, she said.
“We’re hearing from our reps in the country that farmers themselves are putting pressure on some of the companies at the elevator level saying ‘we want a wheat board contract,’” Fitzhenry said.
Farmers signing wheat board contracts early will also help, Fitzhenry said.
“We are very confident we can sell anything that we’re given, but we can market more strategically the earlier we know,” she said.