The Canadian Wheat Board will offer new crop-pricing options soon, spokesperson Maureen Fitzhenry said in an interview Feb. 22, but she declined to specify a date, nor say when the board expects to finalize agreements with companies to handle grain on its behalf.
“It’s still our hope that we’ll be able to do something very quickly,” she said.
The Grain Growers of Canada wrote the wheat board and Western Grain Elevator Association (WGEA) Feb. 22 urging them “to use all possible resources to successfully conclude their ongoing negotiations on handling agreements.”
“Farmers want market choice to be real and they want to see the competition,” Grain Growers executive director Richard Phillips said in an interview.
Handling agreements are essential if the post-monopoly wheat board is going to become a grain company Aug. 1 because the board doesn’t own grain elevators or port terminals.
The board’s former board of directors warned without facilities or regulated access to them at a fair cost, it would be impossible for it to survive in an open market. And since the board and companies will be competitors there is no reason for companies to be interested in working with the board.
However, Phillips said companies will play ball to maximize their handle.
“We’ll be trying to do the best deal we can for farmers in the handling system and recognizing the grain-handling companies do have a cost of handling the grain and they have to make a margin,” wheat board president and CEO Ian White said in an interview Jan. 31.
He also said the board expected to reach agreements with all elevator companies soon making it convenient for farmers across the West to sell to the board.
White said he expected there would be competitive tensions between the board and grain companies, but added he was confident agreements would be reached.
“We’re expecting to roll it out (pricing options) through this month, February,” White said.
But it hadn’t happened as of press time Monday.
When the board had a monopoly it negotiated one handling agreement with all the companies through the Western Grain Elevator Association, association executive director Wade Sobkowich said in an interview.
“But now that we’re dealing in an open-market environment, different companies will have different terms,” he said.
The Grain Growers recognizes handling agreements are key to the success of a voluntary board and that’s why it wrote the letter, Phillips said. The board and companies are entering uncharted territory and that’s partly why it’s taking so long, he said.
“At first I was suspicious one side or the other might be dragging their feet, but as we got into this we saw the complexity,” Phillips said. For example, it’s unclear how the prices for lower-grade wheat will be set.
“Once you see the first couple of deals signed I think you’ll see the rest come quickly,” he said.
Agriculture Minister Gerry Ritz wants agreements reached quickly too. Negotiations are going well, he wrote in an email.
“It’s good to see that farmers themselves, through the Grain Growers of Canada, are working to hold the value chain players to account,” he added.
Fitzhenry declined to say if any agreements had been reached. Asked whether the board would ask the federal government to force companies to provide access through regulation she replied: “At this point that’s not something we’re contemplating.”
“That would absolutely be a last step,” Phillips said.
“If there isn’t something by late March something is going to have to happen then. The government or somebody would have to step in.
“After this letter went out suffice to say I received lots of calls. We are very confident deals are going to be agreed to in the near future.”