Alberta farmers will get to sell their grain on the open market next year, say the Conservatives.
The federal government announced in last week’s Speech from the Throne that it would introduce legislation this session to “ensure that western farmers have the freedom to sell wheat and barley on the open market.” That would mean an end to the single-desk policy, which requires Western Canadian farmers to sell those grains through the Canadian Wheat Board (CWB).
Agriculture Minister Gerry Ritz has told the CWB that he would table a law this fall to make the change, which would take effect Aug. 1, 2012, says board chair Allen Oberg.
The board will still be there for farmers who want to use it, says Brian Storseth, member of Parliament for Westlock-St. Paul and member of the federal agriculture committee, but those who don’t will be able to sell their product on the open market.
The Conservatives have lobbied for this change since 2006, Storseth says, and he’s received dozens of calls since the election urging him to follow through on it.
“This is about financial dollars in their pocket, and every year we wait is another [year]that they’re punished unfairly.”
But the board is elected and run by farmers, Oberg says, and they, not the federal government, have the legal right to decide its future. “Legislation to change the rules so you don’t have to have a vote — to me, that’s fundamentally wrong.”
Farmers have consistently supported the single-desk through board elections, says Ken Rosaasen, an expert in grain marketing at the University of Saskatchewan, and will vigorously oppose this change.
“If some people are betting [the board]is going down, I’d be betting the other way.”
The CWB is the largest marketer of wheat and barley in the world, according to the group’s annual report, selling about $4 to $8 billion in grain a year.
Western Canadian farmers have to sell their wheat and barley to the CWB under the Canadian Wheat Board Act. (Eastern Canadian farmers do not.) Supporters say this monopoly lets the board save farmers money on transportation and command stronger prices. Detractors say they can make more money selling on their own.
Who’s right is a matter of fierce debate among economists.
“It’s going to give those who want to control their own destiny the opportunity to sell when they want to sell,” says Larry Martin, a researcher with the George Morris Centre (an agricultural think-tank) — whether they’ll make more money or not will depend on their marketing skill.
Robert Tappauf, who farms west of St. Albert, was confident that his farm would come out ahead. “We have an opportunity to sell our grain for higher prices,” he says, and to sell directly to customers — a fact that could draw more malt and flour plants to the region.
Instead of relying on the board, Tappauf says, farmers will have to take responsibility for selling their own grain. “If you know what you’re doing, it’ll be better.”
That’ll lead to a lot more winners and losers, Oberg says, and higher shipping costs. His farm now saves about $30,000 a year by using the board’s producer cars, which let members avoid many of the fees charged by elevators.
Both the port of Churchill and short-line rail companies are almost entirely dependent on board shipments to fill their cars, he continues, and could lose big with an end to the single desk. “Farmers need to think about the changes very carefully.”
And it will fundamentally change the way the board operates — instead of being the only seller, it will now be one of many.
“You have to set up an entirely new grain organization that would have to compete with big grain organizations,” Oberg says, all in less than a year. The board will also need a big chunk of capital, as it currently does not own its own ports or elevators.
It’s tough to say what will happen to the board under an open market, Martin says. “If they don’t have facilities, it’s going to be tough.” Some analysts predict it will disappear.
Tappauf had two words to say about that: “good riddance.”