3 Min Read
OTTAWA (Reuters) - Canada's government will give the Canadian Wheat Board certain financial guarantees, but will not give it seed capital or regulated access to grain handlers after the board loses its grain marketing monopoly next year, according to draft legislation unveiled on Tuesday.
The Conservative government has long promised to end the board's 69-year-old monopoly to market Western Canada's wheat and barley for export or milling.
The change would allow farmers to sell directly to grain handlers, instead of marketing those crops only through the Wheat Board.
The draft legislation said Ottawa would continue to guarantee Wheat Board borrowing for a five-year period, guarantee the board's initial payments to farmers and help with downsizing costs. But it will not provide seed capital or regulated access to grain handlers
The assistance falls well short of requests by the CWB as it moves to become a voluntary marketer of grain in an open market system. The Wheat Board, which had revenues of C$5.8 billion ($5.7 billion) in 2010-11, has no retained earnings or grain-handling facilities of its own.
Viterra Inc, Richardson International Ltd and Cargill Inc own the largest networks of grain-handling elevators and port terminals in Western Canada.
The Conservative government aims to pass its legislation by the end of 2011. The CWB's monopoly would end as of August 1, 2012, the start of the 2012-13 crop marketing year.
Canada is the biggest exporter of spring wheat, durum and malting barley, mostly through the Wheat Board.
The Wheat Board's elected chairman, Allen Oberg, vowed on Monday to fight the government's bid to end the monopoly. But once the House of Commons passes the new legislation, Ottawa will remove all 10 farmer-elected directors of the board, including Oberg, leaving in place Chief Executive Ian White and four other federal appointees.
The new board has four years, likely starting early in 2012 after the legislation is approved, to draft a sustainable business plan, which it would implement in the fifth year.
Reporting by Rod Nickel, David Ljunggren and Louise Egan; editing by Rob Wilson