July 8, 2011 / 4:09 PM / in 6 years

Government to look at regulating access to grain handlers

WINNIPEG, Manitoba (Reuters) - Canada is considering a request by the Canadian Wheat Board for regulated access to private grain handlers once the board loses its monopoly, federal Agriculture Minister Gerry Ritz said on Friday, but he added that such access may not be enforceable.

<p>The Sawyer family harvests their crop of wheat with combines near Acme, Alberta, September 23, 2009. Alberta, a key growing area of spring wheat and canola, has been hit hard this year by cool weather and drought. REUTERS/Todd Korol</p>

The Conservative government, which holds a majority of seats in the House of Commons, plans to pass legislation this autumn to scrap the world’s last major agricultural monopoly as of August 2012.

The Wheat Board has no grain-handling and storage facilities or retained earnings and has asked Ottawa to give it regulated access at favorable rates and times to private handlers and capital, if it tries to compete in the open market.

“We’re looking at all avenues moving forward. Certainly that is on the table,” Ritz said in a conference call with reporters. “But these are private sector companies that offer services. I‘m not sure that regulation could be enforceable but we’ll take a look at all ideas that come forward.”

Ottawa will likely come under intense pressure from private grain handlers not to impose new regulations and it’s unlikely to mesh with the Conservative government’s aim to open markets.

Western Canada’s biggest grain handlers are Viterra Inc, Richardson International Limited and Cargill Inc. Grain handlers have said they would work with the Wheat Board even in a competitive marketing system, but the CWB has expressed doubts.

In an interview with Reuters on Thursday, the president of Richardson, Curt Vossen, said he doesn’t want to see the Wheat Board gain any government-granted advantage.

“To create regulations to give it validity, an artificial flow of capital ... we would be very clearly against.”

Also on Friday, the Western Canadian provinces of Saskatchewan, Alberta and British Columbia said they support Ottawa’s plans to scrap the Wheat Board’s grain monopoly.

The support leaves Manitoba, where the Wheat Board is based, as the lone western province to oppose Ottawa’s plans.

“Marketing opportunities are being lost every day and it’s vital that Alberta’s grain producers be able to market their product to anyone they choose,” said Alberta Agriculture and Rural Development Minister Jack Hayden in a joint news release by the provinces.

Alberta has long been the hub of opposition to the monopoly and, along with Saskatchewan, has some of Canada’s largest farms. Both of those provinces have right-leaning provincial governments, similar to the federal Conservatives, while the left-leaning New Democrats lead Manitoba.

“Saskatchewan farmers spend their own hard-earned money on land, machinery and inputs to grow their own crops, so why shouldn’t they have the marketing freedom to decide how, when, and to whom they sell their grain?” said Saskatchewan Agriculture Minister Bob Bjornerud.

The monopoly, which dates back to World War 2, requires farmers in the three Prairie provinces and one region of British Columbia to sell wheat, durum and barley for human use or export only to the CWB.

Scrapping the monopoly will let those farmers sell to whomever they choose, as they already do for other crops, but some farmers say losing the single desk will lead to lower prices.

Reporting by Rod Nickel; Editing by Lisa Shumaker

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