Anderson and Stewart rave over first year of Marketing Freedom

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Saskatchewan Agriculture Minister Lyle Stewart along with MP David Anderson, Parliamentary Secretary Minister of Agriculture and Agri-Food for the Canadian Wheat Board, are trumpeting the one-year anniversary of Marketing Freedom.

Both attended a celebration at a farm near Pense with federal Agriculture Minister Gerry Ritz on August 1 where they celebrated the removal of the Canadian Wheat Board single desk monopoly and the ability farmers now have to market their own wheat and barley.

"Farmers seem to be really happy with the changes. We've had an increase in prices. It appears that the grain is moving better than it has in the past off of the prairies. And grain production is going up. So it appears that the changes to marketing have really been to the farmer's advantage," Anderson said during an interview following last Thursday's event.

Stewart, who attended a media event exactly a year ago to mark Marketing Freedom day in 2012, is also pleased with year one of marketing freedom.

"You just don't hear anything negative about the changes one year in. Its been absolutely seamless," Stewart said.

"It's made the agriculture industry a better industry, and by doing that its made the province a better place, and a place where we can expect to see a lot more processing and a lot more work done with our agricultural products in the future."

"This should have been done long ago, but we now have a federal government that's willing to risk a little political capital to do what's right out here. I have nothing but praise for them for doing it. As a provincial government we just had a supporting role in that, and pleased to do whatever little we could, but the feds deserve the credit for it. And as a farmer, I certainly appreciate it very much. And I think they not only did the right thing, but they did it very well. There hasn't been a single glitch that I'm aware of in the first year of operations this way," Stewart added.

The Canadian Federation of Independent Business (CFIB) released the results of a recent survey of Prairie farmers who sell wheat and barley, highlighting that 81 per cent of respondents say the ability to market their own product to the customer of their choice has been positive.

CFIB farm members experience a variety of benefits from marketing freedom:

- Greater control of decision making for their product - 78 per cent;

- Better market signals (price, quality, quantity) - 66 per cent;

- Better access to competitive prices for their product - 66 per cent;

- Increased cash flow - 62 per cent;

- Greater opportunity to niche market their product - 42 per cent;

- Less stress because of greater control over prices for product - 37 per cent;

- Lower costs of getting their product to market - 27 per cent.

“A common theme among farmers surveyed is the fact that they are now able to better manage their cash flow and time of sale of their grain when it best suits their business,” said Marilyn Braun-Pollon, CFIB’s vice-president, Prairie & Agri-business. “One producer summed it up best when he said he now has better cash flow, logistics control, and the sky didn’t fall.”

Anderson noted there have been few hiccups in the system.

"If you talk actually to the grain companies they'll say it took a little while for them to make the adjustment. But they're very happy with it as well. It's giving farmers more opportunities even in the way that they put train lots together. They talk about being able to mix speciality crops and different types of grain in the same ship. So they don't all have to have one grade for the entire ship, they're able to put a few different things in a ship when they're loading now. They're free to make those decisions and it seems that the system actually works better with them having that responsibility and that ability."

Anderson also notes that while traveling across the Cypress Hills Grasslands Constituency this summer he is hearing little of the once contentious issue from producers.

"I can honestly say I really haven't had any comment on the Wheat Board, one way or another, over the last six months. So it would seem that people are really happy with the way things have gone. They've adjusted well to being able to market their own grain. And then of course prices have been high, so people have been very happy to take those prices as well."

Admittedly, Anderson feels prairie farmers are where they should be one year into Marketing Freedom.

"Absolutely. I think for me the big issue was always freedom. People having the freedom to be able to make their own business choices. The benefits that happened this year in particular is that people have been able to make really good money off of this. They seem to be getting a premium on their grain. The grain has moved off the prairies, which we thought might be an issue because there was still a big part of last year's grain to move at August 1 last year. And then obviously farmers are expressing their confidence that they're seeding more wheat than they have in the past," Anderson said.

The Canadian Wheat Board Alliance is contradicting all the positive views of Marketing Freedom, arguing that the private market fails farmers.

“A year after the end of the single desk Canadian Wheat Board it is clear western farmers are no longer receiving the full value for their grain. It is also clear most of the missing value is being taken by the private grain trade,” Bill Gehl, chairperson of the Canadian Wheat Board Alliance stated in a press release regarding the one year anniversary of the loss of the Board.

“The 2012-2013 crop year is very much like the past 2010-2011 crop year where corn is in short supply and feed grain prices have risen. The big difference is that when farmers used their single desk Canadian Wheat Board we got a $2.78 per bushel premium for high protein wheat (between 11.5% and 15.5%). Today those premiums are largely missing in action,” Gehl pointed out.

Gehl also noted another worrying change in Canada’s grain industry. “Our major customers, including the Chinese and Japanese food agencies are now on record as complaining the private trade is not providing the same level of quality and customer care that our farmer-controlled Wheat Board did.”

“Ending the single desk threw away our international market niche of supplying the highest quality wheat and durum to the richest markets on the planet. With the almost complete loss of protein premiums, western farmers are receiving what every other farmer gets from the lower end of the global grain market.”

“The private trade now takes ownership of our grain at the inland elevator and is free to take any higher protein premiums for their own profit while farmers are seeing higher freight and handling costs deducted for getting grain to customers. It is no surprise we have seen a gold rush of takeovers and consolidation in the private grain handling and marketing sector to take advantage of farmers’ loss of market power. The essential disappearance of protein premiums to farmers over the past year speaks for itself” Gehl said.

While prices this year have been better than expected Gehl is concerned these prices are masking the true reality that farmers face.

“Farmers who think this year’s apparently higher grain prices are the result of ending the Wheat Board are living in a fool’s paradise. Grain prices are generally higher because the United States has suffered the worst drought and production failure since the 1930s. When production reverts to normal, western farmers will find themselves facing a new and harsh reality,” Gehl concluded in his press release.

Geographic location: Saskatchewan, Pense, Canada

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