Canadian farmers would likely be better off in an open market too, even in the absence of farmer-owned co-ops, according to the chairman of an Australian grain-marketing co-op now working in such a market.
With the Australian Wheat Board (AWB) having lost its wheat-marketing monopoly, pooling continues in Australia, according to Ian Wandel, chair of farmer-owned CBH Group.
That’s even though some experts predict the pooling system can’t last in an open market, because farmers will jump in when prices fall and sell on the spot market when prices are rising.
Wandel told the Western Canadian Wheat Growers Association’s annual meeting that the solution is to close a pool when prices fall and open a new one.
Wandel said the CWB would survive in an open market. It has a good reputation and sells a quality product. The days of monopoly sellers having market power are gone now that there are very few big, state-owned grain buyers, he added.
As for the CWB having to use competitors’ facilities, Wandel said it’s done routinely in Australia. The CBH Group co-op handles grain for competitors and must charge the same for those services as it does itself. The Australian Competition and Consumer Commission monitors CBH to see it treats competitors fairly.
CWB director Bill Toews said the CWB is not like CBH, which owns grain storage facilities, ports and seven flour mills in southeast Asia, or the AWB, which has even more assets. The CWB had a plan called “Harvesting Opportunity” to go that direction. The plan required legislation, but the Conservative government rejected it.