October 7, 2011 / 8:53 PM / 6 years ago

Canada says law to end grain monopoly coming soon

WINNIPEG, Manitoba - (Reuters) - Canada’s Conservative government will pass legislation “very soon” to end the Canadian Wheat Board’s monopoly on milling and exports of western wheat and barley, Prime Minister Stephen Harper said on Friday, strongly warning the board to get out of the way.

Harper, in Regina, Saskatchewan for the announcement for construction of Western Canada’s first major durum-processing plant in years, said his government will introduce legislation shortly after next week’s House of Commons break and pass it soon after. The monopoly would end as of August 1, 2012.

“This is a historic change that has been long overdue,” Harper said of the CWB’s 69-year-old monopoly. “It’s time for the Wheat Board and others who have been standing in the way to realize that this train is barreling down a Prairie track. You’re much better to get on it than to lie on the tracks because this is going ahead.”

The Wheat Board controls marketing for all of Western Canada’s wheat, durum and barley for export or milling. Seeking to capitalize on the end of the monopoly, Alliance Grain Traders said on Friday it will build a durum- and legume-processing plant at Regina.

Saskatchewan-based Alliance already processes durum at its facilities in Turkey, and will now spend C$50 million ($48 million) to build Western Canada’s only major durum processor starting in 2012.

Farmers produce most of the country’s durum for marketing through the Wheat Board, which is the world’s biggest exporter of the wheat that is used to make pasta.

Farmers supported keeping the wheat monopoly in a recent non-binding vote held by the Wheat Board, but they also overwhelmingly supported the Conservatives in the federal election this spring.

“Ending the Canadian Wheat Board’s monopoly is clearly sending a signal that Canada is open for business,” said Stephen Vandervalk, president of the Grain Growers of Canada.

Processors want to sign contracts directly with farmers to lock in supplies but can’t do that under the monopoly, he said.

The notion that a durum plant couldn’t operate under a wheat monopoly is “nonsense,” countered Stewart Wells, one of the Wheat Board’s elected directors, based in Saskatchewan.

“There’s no reason why anyone with a good business plan wouldn’t be able to build their operation and still have a strong Wheat Board that’s getting a fair price to farmers for their grain.”

Much of Western Canada’s durum is currently processed in mills in eastern Canada or in the U.S. Northern Plains, including the Dakota Growers plant owned by Viterra Inc.

Alliance shares closed up 5.9 percent, or $1.27, to C$22.79 on the Toronto Stock Exchange.

($1=$1.04 Canadian)

Additional reporting by Louise Egan in Ottawa; Editing by Janet Guttsman

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