Canada: Ottawa farmers to end CWB's barley monopoly

Ottawa will move to end the Canadian Wheat Board's monopoly on barley sales from Western Canada by August 1 after most farmers voted against keeping the traditional system, Agriculture Minister Chuck Strahl said, according to Reuters, March 28.

The government will soon begin work on changing the Canadian Wheat Board regulations to open up barley marketing by the new crop year, Strahl said.

"You can't misinterpret this. Farmers want choice on barley," Strahl said of the results of a plebiscite organized by the federal government.

He said more than 29,000 farmers or slightly more than half of eligible voters mailed in ballots, with a total of more than 62 percent voting to end the monopoly.

Strahl said 48.4 percent voted to make the CWB an optional agency, and 13.8 percent voted to remove the CWB from barley sales altogether.

Another 37.8 percent of farmers voted to keep the CWB's monopoly on barley sales to maltsters and export markets, Strahl said.

The CWB is one of the world's largest grain marketers and has often been the focus of attacks by the United States and European Union, which argue it distorts international trade.

The agency, which has a marketing monopoly on western Canadian wheat and barley for human consumption and export, had revenues of C$3.5 billion ($3 billion) in the 2005-06 marketing year, which ended July 31.

Only 11 percent of its revenues came from barley sales that year. Farmers grew almost 11.7 million tonnes of barley in 2005, but sold most of it directly to the domestic livestock market, delivering only 2.5 million tonnes to the CWB.

The CWB has said the agency may bow out of the barley business if the monopoly ends because it does not own handling facilities and may not be able to compete with grain companies.

"Mr. Strahl has perpetrated a snow job on farmers suggesting that they could have their cake and eat it too, and we've said that's not going to be the case," said Bill Toews, a farmer elected to the CWB's board.

The board of directors has publicly clashed with Strahl over the Conservative government's promise to end the CWB's marketing monopoly, and it has launched legal challenges to two government orders.

The board will analyze Strahl's announcement to see whether it conforms to the CWB's legislation, Toews said.

"If he tried to do something outside the (CWB) Act, I suspect there will be another challenge, but we will have to wait and see what he has in mind," he said.

The merits of the monopoly have long been a matter of debate for Canadian Prairie farmers.

Some say the monopoly gives farmers clout in a world market dominated by large multinationals, and point to studies showing farmers get premiums because of the "single desk" seller.

Others believe they could get better prices on their own, and believe the monopoly infringes on their property rights.

"If they (the CWB) can offer an option to me on my farm that is profitable to my bottom line, I'll use them," said Jeff Nielsen, president of the Western Barley Growers Association.

Most of the CWB's revenues come from wheat sales, but Strahl said there would be no changes to the wheat monopoly for the coming crop year.

"If there was to be a change, we would consult with a plebiscite," Strahl said, adding he had no timeline for such a vote.

($1=$1.16 Canadian)

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