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    Free barley, free at last.

    Barley, free at last
    End of CWB monopoly will produce immediate benefits

    Wed Apr 4 2007

    Rolf Penner





    EXCEPT for a few sticks-in-the-mud, no one doubts any longer that Prairie farmers want choices in how they market their barley. By restoring dignity and property rights to growers, the new policy will bring clear benefits, not least a declaration that, when it comes to barley, we are open for business.

    The much anticipated plebiscite found that a majority (62 per cent) of farmers voted in favour of marketing freedom. Three of four participating provinces declared that, with the fourth, Manitoba, virtually split down the middle, at 49.4 per cent. Albertans were the most strongly for choice, with 78.6 per cent of the vote. The results are almost identical to those contained in the Canadian Wheat Board's (CWB) own producer surveys in 2005 and 2006.

    Federal Agricultural Minister Chuck Strahl heard the message loud and clear and intends to move soon to ensure that farmers have the freedom to market their barley to whomever they wish, including the CWB, in the coming crop year. He should move quickly. Farmers are finalizing their seeding plans and marketing strategies for the coming year, and they have just enough time to incorporate marketing choice for barley into them.

    A big benefit farmers will see right away is the ability to know the price they will receive for their barley before they put it in the ground. As with other non-board crops, they can now lock in a profit and a delivery period of their choosing. That's a better option than having to guess when they might be able to haul it in and what they might finally get for it many months down the road. It gives them the control and certainty they need to be successful in today's fast-moving markets.

    Barley is now poised to become the "corn of the north." U.S. subsidies for ethanol are sucking corn away from feed markets and creating shortages. Western Canada could fill that demand with barley and reverse the longstanding trend of importing American feed grains to feed our livestock.


    Benefits will also be felt beyond the farm gate. Western Canada now has the potential to become the malting capital of North America. The major impediment -- maltsters couldn't contract directly with farmers for barley, and had failed to secure adequate supplies from the CWB -- has now been removed. The Prairies have significant advantages for malting barley, among them an ample supply of high-quality water and lower building and operating costs. In recent years we've lost malting capacity to the Americans, but there's now a much better chance for new investment and the creation of many new jobs.
    Opportunities also exist for the CWB to continue as the marketer of choice for many farmers. With more barley grown, a good share of the tonnage should find its way through the CWB's hands. But to remain relevant, the agency will have to change. It needs to regard itself as a "value-chain deal maker," not as a direct competitor with grain companies. The positive relationships that the CWB has with end-use customers will allow it to continue as an effective marketer in both international and domestic markets. And the CWB has a relationship of trust with many growers. All of these relationships have value on which the CWB could capitalize.

    The current directors of the CWB need to appreciate that the war is over. Choice won, and instead of continuing to fight both farmers and government at every turn, they must either change their tune or get out of the way. A proper respect for farmers' property rights and for the democratic process just conducted dictates that this is not the time to waste more farmers' money on high-priced Toronto lawyers looking for legal loopholes. It is time to respect farmers' wishes. Period.

    The implementation of marketing choice for barley is sound public policy, a rarity for a federal government that has grown too large and too intrusive. Harper's government and Chuck Strahl deserve congratulations for making good on their election promise.

    Free barley, free at last.


    Rolf Penner is a Manitoba farmer and the Agricultural Policy Fellow for the Frontier Centre for Public Policy. www.fcpp.org.

    #2
    Yes, and the lamb shall lie down with the lion and await it's eventual slaughter.

    Dream on you "freedom fighters", dream on. Pie in the sky until the "money is in the bank". Like de old folks used to say, "the proof is in the pudding".

    I sincerely hope that farmers do get some advantage from this change in marketing but I don't trust the politicians who think that THEY have all of the answers. We have been "burned" before.

    Comment


      #3
      Would that include CWB directors?

      Comment


        #4
        Just a reminder that malt barley is only about 20 % of total western Canadian disappearance with the remainder currently. On domestic feed barley, you have the choice of dealing with big companies or brokers or directly with a different price/payment risk on each one. WBGA is working on a cash clearing house project that will effectively deal with transaction (risk of either the buyer or seller not performing on a contract).

        I suspect most professional malt barley growers (selections at least 7 years out of 10) have a solid relationship with a domestic right down to the personal level (know the selector).

        Farmers will have to understand how malt barley prices are formulated and what key markets to watch but you already do this with other crops. The move to an open barley market will not be a big issue.

        Comment


          #5
          "But to remain relevant, the agency will have to change. It needs to regard itself as a "value-chain deal maker," not as a direct competitor with grain companies."

          Rolf identified the successful route forward here, the only route forward.

          Compare this to the narrow mindset of the logic challenged CWB BOD's

          Would you invest in a company whose success is 100% dependent on its competitors?

          These guys are still trapped in 1927 when the pools were formed to by-pass the existing grain companies. Grain companies were the enemy then and they are the enemy today, the Wilagro's of the world just can't think any other way.

          Wilagro and and the Seven Dwarf Minds at the CWB board table, can't see the route forward because they can't get past their distrust and their hatred the private trade. Instead of seeing the private trade as partners and buyers, they see them only as competitors. Even if that private trade is buying wheat in order to mill it or buying barley to malt it and then brew beer with it, they are still competitors and the enemy of the farmer.

          Personally, I believe there is little to no chance the Seven Dwarf Minds will ever change their thinking, and I think the Minister is naive to think they will. He might as well just accept the fact that if the cwb is to be successful in transition to a competitive market, it can only happen if there are people at the cwb who believe it can happen or he could just close the doors and turn out the lights.

          Comment


            #6
            From what I hear,the CWB sent three (3) delegates to the World Barley Malt & Beer Conference in Budapest, March 28-30, 2007

            Bob Cuthbert (Senior Barley Marketing Manager)

            Gord Flaten (Vice President, Marketing)

            Neil Townsend (Market Analyst)


            Parsley

            Comment


              #7
              Parsley,

              Maybe they heard Budapest was nice in spring?

              A little goulash and a strudel sipping on some wine, or maybe enjoying a beer while overlooking the Danube could be quite relaxing I'm sure. Especially when someone else is footing the bill.

              I sure hope they had a good time!

              Comment


                #8
                Yes, I hope they had a good time...after all, they have been under a lot of stress lately.

                Comment

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