Canada: CWB opponents get support from four major malting companies

Opponents of the Canadian Wheat Board's single marketing desk for Prairie barley got support from four major malting companies that now urge Ottawa to press ahead with "marketing choice", Farm Business Communications reported November 27.

The four, under the banner of the Malting Industry Association of Canada, called for "the immediate introduction of legislation to allow for the complete deregulation of barley" effective Aug. 1, 2008, in view of the results of last spring's plebiscite of Prairie barley growers.

The maltsters said they arrived at their position after three months of "extensive discussions" with the CWB to help develop "alternative mechanisms" to market Prairie barley.

"Unfortunately, positions proposed by the CWB so far have not addressed the fundamental issue of providing market-driven price signals to both growers and end-users," the group said, viewing such signals as "essential" to protect both farmers and maltsters by giving them the ability to hedge their commodity risk.

The group's member companies include Prairie Malt (co-owned by Viterra and Cargill) of Biggar, Sask., ADM Malting in Winnipeg, Canada Malting Co. of Calgary (co-owned by ConAgra) and Minnesota-based Rahr Malting, which operates a malt plant at Alix, Alta.
Collectively, they said, they buy about 1.1 million tonnes of malting barley per year, making them the largest customers of the CWB.

Prairie Malt, for one, had urged the federal government this spring to hold off for a year on its plans to implement what the Conservatives had termed "marketing choice."

The company at the time had warned the government that it needed until Aug. 1, 2008 to fill or unwind existing contracts and secure future supplies. Otherwise, it predicted costs in the eight-figure range and warned the government it would be liable for those.

The government had planned to hold what it called "Barley Freedom Day" on Aug. 1 this year, but was blocked by a federal court ruling favouring a group of CWB supporters who disputed the government's process for deregulation.

Citing the maltsters' support, the Grain Growers of Canada and the Western Barley Growers Association, a GGC member, each called on Ottawa Tuesday to introduce legislation right away to open the Prairie barley market.

GGC president Ross Ravelli also called on the federal opposition parties to "not unreasonably delay this needed change."

WBGA president and Alberta barley grower Jeff Nielsen added that he grows two varieties wanted by maltsters within reach of his farm, "yet I have been able to get better prices and contracts with our livestock feeding sector."

WBGA vice-president Art Walde of Saskatchewan noted that his home province's new government has already revoked the previous government's support for the single desk. "Time is at hand to move forward," he said.

28 November, 2007