Australia minister urges Canada to open grain market

Fri Sep 9, 2011 4:36pm EDT
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By Rod Nickel

SASKATOON, Saskatchewan (Reuters) - Canada is wise to plan the removal of its grain marketing monopoly, Australia's trade minister said on Friday, noting that opening the wheat market has boosted his country's trade position.

Australia dismantled its wheat monopoly under the Australian Wheat Board in 2008, leaving the Canadian Wheat Board as the world's only major agricultural monopoly.

"It's had a very positive impact," Australian Trade Minister Craig Emerson said after meetings of the Cairns Group of agricultural exporters in Saskatchewan, Canada.

Australian wheat now exports to 41 countries with multiple sellers, compared to 17 under the single-desk AWB, Emerson said.

"That's a dramatic lift in export performance and diversification and that's what breaking a monopoly in marketing is all about."

Canada's Conservative government plans to present legislation this autumn to do away with the CWB's monopoly over Western Canada's wheat and barley in August 2012. Holding a majority of seats in the House of Commons allows Conservatives to pass legislation without needing support from opposition parties.

Many farmers want to keep the monopoly and think pooling farmers' grain brings them the highest price. Selling individually to grain handlers gives those companies the upper hand on farmers, some say.

But Emerson said a monopoly doesn't necessarily seek to maximize profits. The arrival of multinational farm companies like Viterra Inc and Agrium Inc since the monopoly breakup has been helpful and given Australian farmers choice, Emerson said.

"If you enter a race and you're the only entrant, you're probably not going to run very fast. But if you've got a red-hot field, it's going to bring out the best in you." (Editing by David Gregorio)

<p>Australian Minister for Trade Craig Emerson listens to a question at a trade ministers news conference at the Asia-Pacific Economic Cooperation meetings in Big Sky, Montana May 20, 2011. REUTERS/Rick Wilking</p>