Let the market work. That s what the working group on the transition to an open market and voluntary Canadian Wheat Board Aug. 1, 2012 advises Agriculture Minister Gerry Ritz in its report released Sept. 28.
The government should let the open market function and intervene only where necessary to address actual market failures, the report states.
The government should quickly modernize the Canada Grain Act, Canadian Grain Commission and implement recommendations from the Rail Freight Service Review. The latter will give grain shippers the right to a service agreement with the railways, including penalties when the railways fail to perform.
Open-market sup-porters praised what Ritz described as an extensive report, but single-desk advocates complain this road map reads more like a manifesto.
A number of issues aren t covered, including:
Issues not addressed
” The impact on the Port of Churchill and the Hudson Bay Railway that serves it.
” The impact on other ports, especially Prince Rupert , which could see traffic decrease and Vancouver, where congestion might increase.
” Rail car allocation, especially at peak demand.
The report also doesn t deal with who should own the board and be responsible for its liabilities or the cost of winding it down.
Obviously it s pretty thin gruel, District 10 wheat board director Bill Toews said. There s no proper direction given to the industry. The recommendations are so thin the minister could pretty well do nothing and things would happen just the same.
The report fails to explain how a voluntary board can exist, he said.
This idea that somehow the… board under the single desk can transform itself into a voluntary agency is just pie in the sky it s not going to happen.
Tim Coulter, president of the Producer Car Shippers Association of Canada, said the report fails to reassure producer car shippers and short line railway owners that both will be viable.
It s so ambiguous, he said from his farm at Briercrest, Sask. It doesn t have strong enough language for what we were looking for.
Farmers have invested millions
of dollars buying short line railways and building producer car-loading facilities, he said.
The recommendation that short line railways ask CN and CP Rail to give them multi-car incentive rates doesn t sit well with Coulter.
We ve been fighting with the railways over that for I don t know how long and it has never been solved, so I don t know how just talking to the railways would solve that problem, he said.
The biggest concern the working group heard from farmers was access to port terminals for small grain companies and the proposed voluntary board, Richard Phillips, working group member and executive director of the Grain Growers of Canada, said in an interview.
The report recommends the agriculture minister maintain farmers right to producer cars and monitor their availability and use.
The report doesn t say why grain companies will accept producer cars at port when they rarely do now. When asked if he could reassure producer car shippers, Ritz said in an email: The CWB monopoly has no bearing on access to producer cars, this is an unfounded myth pushed by the CWB.
The government will continue to protect access to producer cars, he added.
Fierce competition between grain companies to buy canola might explain why so few producer cars of canola are shipped, Phillips said.
Short line railways should negotiate grain-sourcing agreements with terminal operators. Phillips said.
The competition, investment and profitability we see for canola, oats and pulse crops certainly gives us every reason to believe we ll soon see the same vitality in wheat and barley markets, Western Canadian Wheat Growers Association president Kevin Bender said in response to the report.
Acting on the report s recommendations will help smooth the transition to an open market.
Report seen as positive
Western Barley Growers Association president was equally sanguine.
This report is certainly positive for the industry and will help Minister Ritz address the concerns of industry as we move forward to marketing freedom, he said.
Nat ional Farmers Union president Terry Boehm said the report might as well have been copied on the WCWGA website.
Market forces… have never worked for farmers, he said. That s why we created the Canada Grains Act and the grain commission and the wheat board and the wheat pools. It was dealing with the power imbalance. These guys are carte blanche just creating a situation where farmers have no power.
The report also recommends replacing money that would ve come from the board for market development and research with a short-term, five year, refundable checkoff while exploring a long-term replacement and the establishment of provincial wheat and barley commissions.
If the board doesn t come up with a plan to operate in an open market, the government should, the report says.
Farmers have generally accepted, the loss of the single desk and are anxious to get on with an open market, the report says.
The working group believes that some of the concerns represent fear of change rather than real roadblocks that would prevent producers and the system from adjusting, the report says.
With any change there is uncertainty but the working group is confident in the ability of the sector to adjust and adapt so that it will be stronger after the transition.
The full report is available online: http://www4.agr.gc.ca/AAFC-AAC/display-afficher.
Wheat board director Bill Toews says the working group s report on transitioning to an open market lacks detail.PHOTO: ALLAN DAWSON