Dominoes starting to fall as end of single desk draws nearer

Research and market development, keeping an eye on the railways, 
and the fate of short line railways are just three of the issues KAP is trying to address

Manitoba’s farm leaders are scrambling to plug holes that will be left by the demise of the single-desk CWB.

Research and market development, keeping an eye on the railways, and the fate of short lines were high on the agenda when Keystone Agricultural Producers delegates gathered at their General Council meeting last week.

But challenges are many, as illustrated by the effort to create a new organization for spring wheat and barley growers. Delegates voted in favour of KAP leading a steering committee of stakeholders to work to that end and earlier this month met with representatives of the National Farmers Union, Western Canadian Wheat Growers Association, Manitoba Seed Growers Association, Prairie Oat Growers Association, and Winter Cereals Manitoba.

“The other organizations were generally supportive and agreed to discuss the issue with their boards and get back (to us) as to whether or not they want to put a name on the steering committee,” said Don Dewar, chair of KAP’s Open Market Transition Working Group.

“I think the individuals present really thought we should be moving forward.”

The need for some sort of body is clear.

Checkoff

When the wheat board loses its single desk on Aug. 1, it will stop collecting a wheat and barley checkoff on behalf of the Western Grains Research Foundation for research. Gone too, will be the $2.2 million it gives to the Canadian International Grains Institute (CIGI), which is nearly half of its core funding. Ottawa will set up a temporary checkoff, but wants farmers to take it over in the next four years.

But in a recent news release, the NFU said provincial wheat commissions can never replace the wheat board and said the focus should be on the court battle to save the single desk. However, others argue it’s better to start preparing now.

“We’re just facing reality,” said Starbuck farmer Reg Dyck.

Another idea making the rounds is the creation of a wheat commission equivalent of the Canola Council of Canada, which represents the whole industry from canola seed developers to processors and exporters. However, some farmers complain big companies have too much sway over the council.

Others fear even a farmer-only wheat and barley association would drift into farm policy and even draw away members from KAP.

“What you’re doing here is starting your own demise,” said Lowe Farm producer Butch Harder.

New organization

Then there’s the time and effort involved in setting up a wheat and barley organization, a process KAP president Doug Chorney said could take two years. Implementing a checkoff would first have to be approved by farmers through a vote.

And while a single Prairie body would allow sharing of administrative costs, provincial regulations don’t allow for that. Eventually, provincial wheat associations and commissions might voluntarily create a national council, but that’s years away, Dewar said.

Nobody speculated on how much Manitoba’s spring wheat checkoff might be. The new Alberta Wheat Commission plans to collect $1.25 a tonne, according to Lynn Jacobson, president of the Wild Rose Agricultural Producers Association. CIGI and the Western Grains Research Foundation will get 25 and 30 cents a tonne, respectively.

Delegates were also concerned about what will happen in grain transportation once the single desk is gone. Delegates passed a resolution to lobby the federal government to expand its program for monitoring grain handling and transportation beyond shipments to the West Coast and Thunder Bay, to include Eastern Canada and the U.S.

The monitoring program was introduced in 2001. It has tracked steady improvement in many areas, including car cycle times, but it has also highlighted problems, such as failures to deliver cars on time. Until now much of that sort of data has come from the CWB, but it won’t after Aug. 1.

“The government already has the legal authority to access the information but the minister has to act on that authority,” noted Dewar.

Then there’s the fate of short line railways.

Dewar’s working group has met with the Boundary Trails Railway Company, which operates a short line railway from Manitou to Morden. The company, owned mainly by farmers, has relied on producer cars allocated by the wheat board, but it’s not clear if that will be economic in an open market. An alternative would be to load 50-car trains, but short lines aren’t given the same discount the big grain companies earn for loading 50 or more cars within a specified time. Delegates passed a resolution to lobby Ottawa for equal treatment of short lines.

Examining impact

Dewar’s group has also been examining the potential impact of Glencore International’s purchase of Viterra, which resulted in fertilizer giant Agrium scooping up the latter’s crop inputs business — a worrisome move in a sector many view as already lacking sufficient competition.

“While we won’t see any elimination of competing retail outlets in the short term in Manitoba, the long-term impact on the marketplace will be significant,” said Dewar. “It’s a big concern and we’re asking the Competition Bureau to look at this issue.”

The Glencore deal is just another sign of how quickly the grain industry is changing, said Chorney.

“Clearly the industry is fairly fluid right now and we see a lot of changes that will be affecting many of us in our trade areas and I don’t think there’s a farmer in Manitoba that won’t be affected by these changes,” he said.

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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