11:42 17Oct11 RTRS-UPDATE 1-Wheat Board chairman asks Ottawa for support
* Asking for C$225 mln to operate, C$200 mln reserve
* CWB has no grain-handling sites or retained earnings
* Farm minister says CWB "yesterday's solution"
(Recasts with CWB request from government, minister comments)
By Rod Nickel
WINNIPEG, Manitoba, Oct 17 (Reuters) - Legislation to end the Canadian Wheat Board's monopoly on Western Canadian grain sales will "destroy the CWB," and Ottawa must help any successor organization to compete in the open market, the board's chairman said on Monday.
The Conservative government plans to introduce legislation on Tuesday to end the CWB's long-standing marketing monopoly by Aug. 1, 2012, and open the market for Western Canadian wheat and barley grown for milling or export.
The change would allow farmers to sell directly to grain handlers, instead of marketing those crops only through the Wheat Board.
"Legislation will be introduced this week that will destroy the CWB," said Allen Oberg, an Alberta farmer and the CWB's chairman. "Meanwhile, any chance for a successor organization is being crippled by this government's reckless approach."
Oberg said any entity that would operate as a voluntary grain buyer to replace the Wheat Board would need C$225 million ($221 million) to buy grain and operate. It would need regulated access to grain-handling facilities and continued government guarantees for its borrowings for at least five years.
It would also require a C$200 million reserve to replace current guarantees of initial payments to farmers, government ownership of the new organization for the short term and the authority to direct grain for export, he said.
The Wheat Board, which operates under federal legislation, has held its marketing monopoly for 69 years, but it has no retained capital or grain-handling facilities of its own.
Agriculture Minister Gerry Ritz, speaking on an Alberta farm on Monday, said the Conservative government expects to pass legislation by the end of the calendar year that would end the monopoly in August.
"The Canadian Wheat Board monopoly, born in a different time to meet different needs, has cast a chill on key parts of the grain sector in Western Canada," Ritz said. "The six-decade-old Canadian Wheat Board monopoly is yesterday's solution to yesterday's problems."
The biggest Canadian grain handlers are Viterra Inc <VT.TO>, Richardson International Ltd and Cargill Inc [CARG.UL].
A grain industry taskforce recommended to Ottawa last month that it avoid regulating grain handlers to ensure access. [ID:nS1E78R1CM]
The Conservative government holds a majority of seats in the House of Commons and can pass legislation without needing support from opposition parties.
Oberg said the CWB's board hopes to meet with Agriculture Minister Ritz soon. But Ritz noted that the board declined to participate in its task force and turned down a meeting recently to meet with another Conservative legislator while Ritz was away traveling .
($1=$1.02 Canadian) (Reporting by Rod Nickel; editing by Rob Wilson) (
* Asking for C$225 mln to operate, C$200 mln reserve
* CWB has no grain-handling sites or retained earnings
* Farm minister says CWB "yesterday's solution"
(Recasts with CWB request from government, minister comments)
By Rod Nickel
WINNIPEG, Manitoba, Oct 17 (Reuters) - Legislation to end the Canadian Wheat Board's monopoly on Western Canadian grain sales will "destroy the CWB," and Ottawa must help any successor organization to compete in the open market, the board's chairman said on Monday.
The Conservative government plans to introduce legislation on Tuesday to end the CWB's long-standing marketing monopoly by Aug. 1, 2012, and open the market for Western Canadian wheat and barley grown for milling or export.
The change would allow farmers to sell directly to grain handlers, instead of marketing those crops only through the Wheat Board.
"Legislation will be introduced this week that will destroy the CWB," said Allen Oberg, an Alberta farmer and the CWB's chairman. "Meanwhile, any chance for a successor organization is being crippled by this government's reckless approach."
Oberg said any entity that would operate as a voluntary grain buyer to replace the Wheat Board would need C$225 million ($221 million) to buy grain and operate. It would need regulated access to grain-handling facilities and continued government guarantees for its borrowings for at least five years.
It would also require a C$200 million reserve to replace current guarantees of initial payments to farmers, government ownership of the new organization for the short term and the authority to direct grain for export, he said.
The Wheat Board, which operates under federal legislation, has held its marketing monopoly for 69 years, but it has no retained capital or grain-handling facilities of its own.
Agriculture Minister Gerry Ritz, speaking on an Alberta farm on Monday, said the Conservative government expects to pass legislation by the end of the calendar year that would end the monopoly in August.
"The Canadian Wheat Board monopoly, born in a different time to meet different needs, has cast a chill on key parts of the grain sector in Western Canada," Ritz said. "The six-decade-old Canadian Wheat Board monopoly is yesterday's solution to yesterday's problems."
The biggest Canadian grain handlers are Viterra Inc <VT.TO>, Richardson International Ltd and Cargill Inc [CARG.UL].
A grain industry taskforce recommended to Ottawa last month that it avoid regulating grain handlers to ensure access. [ID:nS1E78R1CM]
The Conservative government holds a majority of seats in the House of Commons and can pass legislation without needing support from opposition parties.
Oberg said the CWB's board hopes to meet with Agriculture Minister Ritz soon. But Ritz noted that the board declined to participate in its task force and turned down a meeting recently to meet with another Conservative legislator while Ritz was away traveling .
($1=$1.02 Canadian) (Reporting by Rod Nickel; editing by Rob Wilson) (
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