Canada: Farmers lose barley value without single desk

After extensive analysis, the CWB board of directors has concluded that no other marketing option comes close to achieving the value the single desk brings to barley farmers, according to CWB’s newsroom, March 26.

“A plan to transition the CWB completely out of barley may be the only realistic option if the single desk is dismantled,” board chair Ken Ritter said. “Recognizing this, the board has agreed that we must work to secure the single desk for farmers.”

The analysis shows that without a radical transformation of the CWB into a grain company with a complete range of physical assets and a large capital infusion, the CWB could not market barley. Even if this transformation could be accomplished, the CWB’s ability to add extra value for farmers would be small compared to the value of the single desk, independently verified at $59-million a year for barley.

Last week, the CWB’s directors continued their extensive discussions and analysis of the conditions necessary for the government’s stated vision of “a strong and viable” CWB in an open barley market.

“The board tested all options against the following proposition: Does the CWB provide farmers with a materially higher net benefit relative to competing entities?” Ritter said. “None of the scenarios we examined could pass that test.

“It is simply not realistic for a farmer-run CWB to continue to market barley without either a single desk or very significant assets.”

Ritter noted that ownership of both port and country grain facilities could help ensure the CWB’s competitiveness with customers and farmers. However, any commercial arrangement would have to be sustainable for the long term, he added.

“If we are unsuccessful in our efforts to secure the single desk for farmers, we would present a strong business case to government for asset ownership and adequate time to transition the business,” Ritter said. “However, we recognize that this would not compensate farmers for the removal of the single desk.”

The federal government is expected to release results of its producer plebiscite on barley marketing as early as this week.

“We are calling on the Government of Canada to carefully consider the consequences of the future of barley marketing in Western Canada,” Ritter said. “We look forward to discussions with Minister Strahl that result in common-sense business solutions.”

Controlled by western Canadian farmers, the CWB is the largest wheat and barley marketer in the world. One of Canada’s biggest exporters, the Winnipeg-based organization sells grain to over 70 countries and returns all sales revenue, less marketing costs, to farmers.

28 March, 2007