Trying to predict the right course through the newly opened waters of grain marketing options is providing a real dilemma for producers weeks into the federal government's move to end the Canadian Wheat Board's monopoly on the sale of wheat and barley.
An audience of approximately 250 individuals attended a day long session in Swift Current to learn more about the changing dynamics in advance of the end of the CWB's monopoly on Aug. 1, but the complete details on how this will impact prairie producers are still being realized.
The Saskatchewan Ministry of Agriculture organized event stopped in Swift Current during the third of a seven meeting series intended to share information on marketing their grain in 2012. The Marketing Freedom for Grain Farmers Act received Royal Assent on Dec. 16, but businesses and producers are now trying to find their way through uncharted waters during a time of major change for agriculture.
The session provided producers with a broad spectrum of information to assist producers in exploring their various options and help them make a decision when the time comes.
Glenn Tole, Director of Farmer Services for the Canadian Wheat Board, noted they are now tasked with developing a series of new programs for a new era.
"We'll try to develop some programs that we feel will be of benefit to you as our growers. Whether you choose to use them or not, that will be up to you guys as we go forward," Tole said during his presentation.
The CWB held their first board meeting with their new board of directors and CEO Ian White on Jan. 11, so admittedly they have not had a lot of time to work out all the details of their direction. But they are facing an August 1 line in the sand and are working towards that date.
"We will be ready as an organization moving forward. We believe that we will be a good marketing option for you as producers, those that choose to do so, and we still believe that we will be a significant player in the Western Canadian agriculture industry."
He noted CWB 2.0 will rely on 75 years of experience in grain marketing, and the global reputation and customer network they currently enjoy. While they now have the opportunity to market what were non-board crops, he anticipates they will not vary far from their traditional strengths.
"We have a lot of work to in that regard too, but I would say today that we're definitely going to be focussing on those core business items that we've had the most experience as we start this process. However I do think there's some huge opportunities for us in other commodities moving forward. And we'll see how that works out for us and for you as producers, and it will all be driven by your demand."
"We are looking for feedback with what commodities you want to deal with us on going forward. We're certainly open to any of your feedback at this point as well. Changes that are going to be made are going to be made my farmers in Western Canada, so we're going to certainly work with you on any of your ideas."
Elwin Hermanson, Chief Commissioner of the Canadian Grain Commission, gave a broad perspective presentation on the changes of the legislature on the CGC's mandate.
Hermanson noted there is a federal government initiative to modernize the CGC after the legislative change, however these changes are likely to be accomplished by changing fees which have been frozen since 1991. Currently 50 per cent of CGC costs are covered by user fees, compared to 90 per cent back in 1991 when fees were frozen.
"The bad news is that those costs, even though we often charge them to elevator companies, will likely get passed back onto you as producers. So you can expect that there would be some increases to your costs," he said.
"There's a recognition by our stakeholders, including producers, that what we do is important. There's no argument that there needs to be a Canadian Grain Commission, and we play a pretty important roll in the industry. However, there's also I think a pretty clear understanding that you can't just keep on doing things the way they've always been done because the industry is changing."
"The government has said they are still committed to changing the Act and they've got some principles in place that they want to adhere to. First and foremost, flexibility, so that we don't have to keep changing our Act every time there is a change in the grain environment in Western Canada. But they want us to retain our effectiveness. They want to remove unnecessary rules and costs. They still want us to be supportive to the grain industry. And they still want us to provide producer protection."
Hermanson explained that he anticipates many of the proposed changes to be rolled out in the near future.
In one specific area, he notes there's been lots of discussion about eliminating inward weighing and inspection. Inward weighing occurs when rail cars are unloaded at the terminals, but with consolidation in the industry, companies are able to put together a unit train of one kind of grain from their primary elevators to deliver to their terminals. Many in the industry are asking why they are charging for inward inspection when crops are direct shipped. There are no planned changes to outward inspection, as this helps Canada maintain its reputation as a reliable and consistent provider of quality.
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