Canada: Canadian Wheat Board's monopoly to continue past harvest

The Canadian government seems likely to miss its target for ending the Canadian Wheat Board's monopoly on barley sales by August 1, when Prairie farmers begin their latest harvest, Reuters reported June 4.

With Parliament's summer break looming on June 20, traders, analysts and lobby groups believe the Conservatives have run out of time to pass a bill intended to give farmers the ability to deal directly with maltsters and export buyers.

"There's only one thing worse than one (barley marketing) system or the other, and that's being in limbo," said Richard Gray, a farm economist at the University of Saskatchewan.

Canada has missed booking barley sales into surging world markets because of the uncertainty over whether the Wheat Board will retain its traditional marketing powers, said Gray, who believes the farmer-owned agency's role in barley markets may remain unclear until Canadians elect a majority government.

The minority Conservatives want to end the CWB's government-granted monopoly on sales of Prairie wheat and barley to millers, maltsters and export markets, beginning with barley. However, the government must rely on the support of at least one opposition party to pass legislation and on the CWB issue it has no support.

The CWB had C$4.95 billion ($4.85 billion) in revenue last year, mainly from wheat, making it one of the world's largest grain traders.

While some farmers support the government's bill, the CWB is controlled by a farmer-elected board, a majority of whom believe the monopoly gives Western Canadian farmers needed clout in a market controlled by multinationals.

The CWB has fought the Conservatives' plans and the three opposition parties in the House of Commons have said they back the CWB. They plan to defeat the government's bill.

The government introduced the bill in early March, but it has not advanced through the approval process.

Instead of putting the bill forward for debate and a vote, the government now plans to take the unusual step of first sending it to a Parliamentary committee -- a tactic Agriculture Minister Gerry Ritz said would speed up the process.

"The government of Canada is pulling out all the stops to give Western Canadian barley producers the freedom they have demanded," Ritz said in a statement.

But the move could give the committee more latitude to make significant amendments to the bill, said Ralph Goodale, house leader for the opposition Liberal Party.

"If (committee members) choose to take the government's bill in a much different direction ... that would be perfectly permissible," Goodale said, adding the review could take time.

A CWB spokeswoman said the agency continues to book barley sales but declined to comment on whether the agency is confident it will keep its monopoly in the coming year.

CWB officials have said the political angst about its mandate has slowed barley sales.

That uncertainty seems likely to continue, given that opposition parties seem "entrenched" against the bill, said Phil de Kemp, president of the Malting Industry Association of Canada, which wants the ability to buy directly from farmers.

"There has to be some political certainty and clarity, and I don't think you're going to see it, even if (the bill) goes to committee," de Kemp said.

The CWB's monopoly may stay intact until the Conservatives secure a majority in a general election, or unless farmers elect monopoly critics to the CWB's board of directors later this year, he said.

05 June, 2008