Local farmers say they plan to break out the champagne today as they celebrate the end of the Canadian Wheat Board's single-desk policy.
The federal government set Aug. 1 as the official end date for the wheat board's single-desk marketing policy. Created in 1940s, the policy required western wheat and barley growers to pool their grains and sell them through the board.
Western farmers, particularly Albertans, had criticized the policy, arguing that it restricted their ability to market their own grain. Supporters and detractors issued warring studies to show that the board's monopoly on wheat sales helped or hurt their bottom lines.
The Conservatives took up the issue and passed a law to end the single desk last December. A group called the Friends of the Canadian Wheat Board is now seeking leave to appeal that law before the Supreme Court of Canada, arguing that the Conservatives were legally required to hold a farmers' vote on the single desk before moving to end it.
Albert Wagner, who represents Sturgeon County on the Alberta Barley Commission, said he planned to break out the champagne today with his friends and toast the start of an open market for barley. "There's some real opportunities coming down the road," he said, and he's pleased to see the single desk come to an end.
Now farmers can sell wheat and barley directly to their customers or the U.S. without having to buy their grain back from the board, said Walter Tappauf, who farms just west of St. Albert. "Now, without the wheat board taking out its pound of flesh, a lot of these things make sense."
New era
The end to the single-desk does not mean an end to the wheat board. Thousands of farmers have already committed to selling through the board's now voluntary pool, board president Ian White said in a press conference Wednesday, and the board expects to capture 30 to 40 per cent of the Canadian wheat and barley crop.
As it does not have any grain elevators of its own, the board has also signed deals with grain companies such as Viterra and Cargill to handle its grain.
Anyone who decides to go it alone will have to shop around for the best price, said Glen Lekach, an agriculture and food lawyer with Miller Thompson with 25 years of experience in the grain industry. "It really depends on your perspective and how good of a job you think you can do marketing your own grain."
Going it alone should help many farmers with their cash flow, Wagner said. With a pool system, you don't get all your money up front because the pool pays out based on the average price it gets during a year. "You could sell the grain and still not have enough money to pay your bills."
By selling on your own, he said, you can get the full value of your crop up front. "I'm not going to stand here and tell you it's a huge windfall," he said, but it should help farmers better manage their finances and crop rotations.
Wagner said this change should create new opportunities for lower quality wheat and barley, especially in China. "There's a real demand there that's growing as more enter the middle class," he said, and a lot of lower quality grain in Canada that the board doesn't bother with (it's currently sold as feed).
As for the board, he continued, it has contacts throughout the world, trained staff and handling arrangements with most of the major grain companies. "There's going to be some growing pains […] but I think they're ready to go."
Tappauf said he was already looking to sell his malt barley directly to China. "Over the long haul, the wheat board was hampering a farmer from making his own decisions." This open market could help smaller companies get the grain they need for niche markets, he added.
Marketing your own wheat isn't much different from selling canola, Tappauf said. "It's not exactly rocket science."
Droughts in the U.S. and Russia have also sent grain prices shooting up, he added, meaning you can make money no matter how you market your crop. "Right now, it's party time."
