Canadian Wheat Board can survive without monopoly: Gerry Ritz

Tue May 3, 2011 5:58pm EDT
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By Rod Nickel

WINNIPEG, Manitoba (Reuters) - The days are numbered for the world's last major agricultural marketing monopoly after the Conservative Party won a majority this week.

The Canadian Wheat Board, which has controlled exports from the world's ninth-biggest producer since before World War Two, would be forced to compete with companies like Viterra Inc VT.TO and Cargill Inc CARG.UL as the government follows through with its pledge to open the market.

Conservative Agriculture Minister Gerry Ritz, fresh off the election trail, told Reuters on Tuesday he was confident the Winnipeg-based board could survive. But a similar group in Australia, despite owning physical terminals that the CWB lacks, lasted less than three years after losing its monopoly.

The upheaval should delight private companies eager to expand in the market, and some think it could spur more investment to entice farmers into expanding Canada's wheat area, which shrunk by nearly one-third between 1991 and 2009.

"There's going to be some changes coming, absolutely. But the board will remain." said Ritz, whose Conservative Party won a majority government on Monday, giving it the legislative clout to strip the board's 76-year-old monopoly and allowing Western Canada's farmers a choice in who they sell to.

"This theory that the board is going to shrink and disappear is absolutely ridiculous."

Canada is the world's biggest shipper of spring wheat and durum, mostly through Wheat Board sales.

The Wheat Board does not own crop storage facilities or port terminals, but instead moves grain through private firms. That system could continue even if the Wheat Board becomes a voluntary pool to compete with the grain handlers, Ritz said.   Continued...