Government may fund Wheat Board's move to open market

Wed Jun 29, 2011 1:04pm EDT
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By Rod Nickel

WINNIPEG, Manitoba (Reuters) - The government would consider giving the Canadian Wheat Board short-term capital to help it adjust to an open market once Ottawa removes its grain monopoly, Agriculture Minister Gerry Ritz said on Wednesday.

Ritz, speaking to reporters in Winnipeg, said funding would depend on the board presenting a suitable business plan.

"We'll have a look at all the options moving forward. Something in the short term? Absolutely, (but) we're not here to make sure the entity survives in perpetuity. They'll have to show us a strong business case in the mid- and long-term," he said.

"This is not a blank check."

Canada's Conservative government plans to pass legislation this autumn to scrap the world's last major agricultural monopoly as of August 2012. The Wheat Board and some farm groups say farmers, not politicians, have the legal right to decide its future.

The Wheat Board has said that to compete in an open system, it will need capital, as well as grain-handling and storage facilities.

To be sustainable in the long term, the Wheat Board needs government support, said Chairman Allen Oberg. That could come from Ottawa continuing to guarantee the CWB's borrowings -- which allows it to borrow more money and at lower rates than it otherwise could -- or providing funding to buy grain and build up handling facilities, he said.

"It's clear from the start (Ritz) hasn't done any analysis on this issue, doesn't seem to have a vision for what a new organization might look like," Oberg said.   Continued...

<p>A farmer drives a combine to harvest wheat in Zouping county, Shandong province, May 30, 2011. REUTERS/China Daily</p>