Wheat Board chairman asks Ottawa for support

[LWeber]

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) (

[bucket]

Oberg just doesn't get it.

[liberty]

I'd really like to play poker against Oberg sometime. He's the kind of player who would push all his chips in with a very transparent bluff. You could make a lot of money playing against someone like that.

For Oberg to plead with the government for some loot at this point is a case of too little, too late. Ever since the Tories got their majority, anyone could see the writing on the wall and the best strategy for the board would have been to admit defeat and try to work with the government to transition out of the single desk sensibly. Instead, they decided on a hail-Mary strategy and stonewalled the government every step of the way. They essentially chose suicide-bombing over negotiation.

If there ever was any good will left in reserve at the CWB that might entice farmers to stick with them in an open market, Oberg has managed to squander most of it.

[ProFarmer]

I hope Harper tells Ogberg to go suck an egg...

[Braveheart]

I think back to the time of the shortlived Continental Barley Market. The monopoly was taken away for North American and domestic barley sales and the cries from board were silent for lost sales compensation, capital base, etc. Granted they were focused on a court case but still, a different appoach.

When oats were taken away completely, was there compensation for lost sales?

Why always regulation with these guys? Regulated access to grain facilities? Respect for someone else's property is nonexistent at the CWB. They should be called the Canadian Regulating and Wheat Confiscating Board.

I can't wait for the end of the CRWCB.

[wilagro]

Ritz doesn't want the CWB to exist...period.

If he had acted in good faith, most of these "transition" details would have been worked out to everyone's satisfaction.

THAT is the truth of the matter.

[GALAXIE500]

Right on Willagro, you hit the nail on the head. Gerry Ritz is another one of those bastards in politics that will go any way the wind blows to make sure he keeps getting a paycheck. He could care less whether the Conservatives work with the CWB to form a new entity, and I dont think Oberg is completeley to blame. I will add however that "complacency" wont get things done, no matter whose side you are on. That is my rant for today.

[FarmRanger]

An "any way the wind blows" politician would never have opened up the CWB single desk can of worms.

On the other hand, someone who recognizes injustice and has the fortitude to tackle the flying monkeys who like the status quo, is NOT leaning any way the wind blows.

Good on Minister Ritz.

[BreadWinner]

What doesn't Ritz get? Oberg has always stated
"all or nothing" so he gets nothing. Duh

[craig]

Oberg's comments suggest that the CWB will continue
to fight the government on this issue. I would not
expect the government to promise anything to the
board under this scenario. Reality suggests that legal
challenges to the change while making some feel good
will only help to line the pockets of lawyers at the
expense of farmers.

[blackpowder]

What you say may very well be true.
However a larger truth that I see is, if the people in power, wherever they were, had truly listened these last 30 years we might be less opposite each other today.

[blackpowder]

should have read to Wilagro

[malta]

Isn't amazing. Ritz and the CPC promised to elimiate the government imposed monopoly and they are doing it. Would the CWB directors and their supports prefer the government break it's promise?

[LWeber]

14:42 17Oct11 RTRS-UPDATE 2-Wheat Board vows to fight Ottawa over monopoly
* Also 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 further CWB comments, details of court challenge)
By Rod Nickel
WINNIPEG, Manitoba, Oct 17 (Reuters) - The Canadian Wheat Board will fight the federal government's plan to end its monopoly on marketing western grain and barley, its chairman said on Monday, even as the CWB laid out requests for Ottawa to help it survive the transition to an open market.
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 told reporters that the Wheat Board will use all available means to try to block Ottawa's dismantling of the monopoly, with the change scheduled to take effect in less than 10 months.
"This is not over," Oberg said. "We cannot in good conscience give up this fight."
If the government's new legislation does not include a plebiscite allowing farmers to decide whether to change the marketing system - something Agriculture Minister Gerry Ritz has already ruled out - Wheat Board directors will meet next week to consider legal action, Oberg said.
The current law requires a plebiscite by farmers, however the Conservative government plans to use its majority powers in the House of Commons to replace that with new legislation.
The Wheat Board, which had C$5.8 billion ($5.7 billion) in revenues in 2010-11, held its own non-binding vote by farmers over the summer, in which a majority said they wanted to keep the wheat monopoly.
Canada is the world's biggest exporter of spring wheat, durum and malting barley.
Ritz, speaking on an Alberta farm on Monday, said the government is determined to pass legislation by the end of the calendar year to end the monopoly in August.

"YESTERDAY'S SOLUTION"
"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 government already faces a court challenge on the plebiscite requirement on Dec. 6 from the Friends of the Canadian Wheat Board, a group of farmers and others.
The challenge may have little chance of stopping the government's plans however, said Anders Bruun, the Friends' lawyer.
The government might pass its new legislation before the court hearing, leaving the Friends' case on uncertain ground, while even a ruling that the government acted illegally may lead to further appeals and the end of the monopoly anyway, Bruun said.
Earlier on Monday, the board released details of the "requirements" for any successor organization to compete in the open market, which Oberg said were sent to Ritz months ago.
Oberg said any entity that would operate as a voluntary grain buyer to replace the Wheat Board would need a one-time injection of C$225 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.
A grain industry taskforce recommended to Ottawa last month that it avoid regulating grain handlers to ensure access. [ID:nS1E78R1CM]
($1=$1.02 Canadian) (Reporting by Rod Nickel; editing by Rob Wilson)

[highwayman]

Mr.Obergs attitude to use all resources at his disposal is all the more reason not to contract a bushel through the board this current crop year. I prefer not to give him the opportunity to confiscate my funds. I believe Oberg and the Crazy 8 will stop at nothing to preserve their ideology firmly believing that they are above the parliment of Canada. Aug 1/2012 cant come soon enough.