CWB chairman tells farmers to face future with eyes open

by World Grain Staff
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REGINA, SASKATCHEWAN, CANADA — The chairman of the Canadian Wheat Board (CWB) on June 16 urged Prairie farmers to focus on the realities that face their grain marketing organization, as the federal government moves forward to dismantle its single-desk structure.

"In my view, the CWB cannot survive without the single desk," Allen Oberg told farmers attending a breakfast meeting at the Western Canadian Farm Progress Show in Regina. "Whether you think that is a good thing or a bad thing is up to you. But we must look ahead with our eyes wide open and the facts clearly in mind. For farmers, the stakes are too high for us to become mired in delusions."

The federal government has announced its intention to remove the CWB's single desk for wheat and barley as of Aug. 1, 2012, with legislation to be introduced this fall. Minister Gerry Ritz has said that farmers will not be allowed a vote on whether they wish to see the single desk removed.

"The Wheat Board belongs to us. As farmers, we pay for its operations from the sale of our grain. We run it, through our elected representatives on its board of directors. But we are not being allowed to decide its future," said Oberg, who is an elected farmer director of the CWB, from Forestburg, Alberta, Canada.

He cautioned producers to carefully consider claims being made that the CWB can remain "strong and viable" in an open market. "The CWB is the single desk," he said. "It is a marketing structure. Its whole premise, its whole value proposition, is built upon the concept that farmers benefit from marketing our grain together, as one."

Oberg also reminded farmers that the CWB is not a grain company and is not permitted to own real assets. It has no grain-handling infrastructure and no capital base for borrowing money or financing its operations. It exists by virtue of legislation and the existence of government financial guarantees. If it were to function as a grain company in an open market, it would be reliant on competing grain companies in order to carry out its business.

"You don't need to be an agricultural economist to see how this would work out in the long term," he said.

The CWB has been examining models for what it could become without the single desk.

"We are assessing each possible model with one measuring stick: will it add sufficient additional value for farmers? Will that value be over and above what would already exist in an open market? If the new model cannot provide that additional value, why bother?,” Oberg said. "There is no model that comes even close to providing the value to farmers that the single desk does right now. There is a couple that might - under very specific conditions - allow the CWB to survive in some form. Under the right conditions, and with some very large concessions, it might even be strong and viable.

"But I have yet to be convinced that it would have any specific value for farmers. This is not resistance to change. It is simply being realistic."

The full text of Oberg's speech has been posted at www.cwb.ca.
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