The Canadian Wheat Board (CWB) is the single desk and can’t survive without it, according to CWB chair Allen Oberg.
“Whether you think that is a good thing or a bad thing is up to you,” he told farmers at the Farm Progress Show in Regina June 16. “But we must look ahead with our eyes wide open and the facts clearly in mind. For farmers, the stakes are too high for us to become mired in delusions.”
The federal government says it will introduce legislation in the fall to create an open market for western Canadian wheat and barley Aug. 1, 2012. Agriculture Minister Gerry Ritz says the CWB can be “strong and viable” in an open market, but Oberg said he hasn’t seen any evidence of that.
The CWB, he said, is looking at options and applying one measuring stick: will it add sufficient value to farmers?
“There is no model that comes even close to providing the value to farmers that the single desk does right now,” Oberg said. “There are a couple that might – under very specific conditions – allow the CWB to survive in some form. Under the right conditions, and with some very large concessions, it might even be ‘strong and viable.’ But I have yet to be convinced that it would have any specific value for farmers.”
The concessions, Oberg said in an interview later, would come from the government, including a large amount of capital to convert the CWB into a grain company, as well as regulations to ensure the CWB has access, at competitive rates, to country and terminal facilities owned by established grain companies. However, Canada’s grain companies have said they don’t want the government subsidizing a new competitor.
Even if the CWB had a monopoly on offshore wheat and barley exports, allowing for an open domestic or even North American market, the CWB would still provide some value to farmers, according to Oberg. But with plans for an unfettered open market, that’s not an option, he said.
The other option would be for the CWB to shrink into a small grain brokerage firm or focus on trade promotion akin to what the Ontario Wheat Producers Marketing Board has done.
During his address, Oberg spoke about what he described as myths around the CWB’s future. One is that the farmers who support the CWB will stick with it in the absence of the single desk. But farmers are in business to make money and voluntary pools have a poor record, he said.
Another is if the CWB fails, it’s because it refused to change. But Oberg said the CWB’s board is legally obliged to operate the single desk.
Up until a decade ago farmer-owned grain co-operatives handled 70 to 75 per cent of Western Canada’s grain. But Oberg said it wasn’t easy for the co-ops to get established. It would be even harder now because there are fewer, but more powerful grain companies, he said.
If a majority of farmers voted to end the single desk, Oberg said he could accept it.
“They are the ones who need to decide,” he said.
Larry Bohdanovich, a Grandview-area farmer and member of the Friends of the Canadian Wheat Board (FCWB), said the same in a news release last week. Under the current CWB Act farmers must approve through a vote a change in the CWB’s mandate, he said.
It’s thought the federal government legislation will remove that proviso.
Ritz indicated at a public meeting March 15 in Minnedosa that he would let farmers vote, Bohdanovich said.
“Until farmers make that change, I’m not prepared to work arbitrarily,” Ritz said. [email protected]
– ALLEN OBERG