October 17, 2011 / 7:44 PM / in 6 years

Canada to support Wheat Board for up to 5 years

WINNIPEG, Manitoba (Reuters) - Ottawa will support the Canadian Wheat Board for up to five years after it dismantles the board’s 69-year-old grain marketing monopoly, a senior government source said on Monday.

The federal government plans to introduce legislation on Tuesday to remove the Wheat Board’s monopoly over Western Canada’s wheat and barley for milling and export.

The Conservative government intends to pass the legislation by the end of 2011 and move to an open market system on August 1, 2012.

For the following five years, Ottawa is willing to help the board survive in an open market, the senior government source said, adding that the government will outline details of its plans in the new legislation.

“Western Canadian wheat and barley farmers can better drive our economy and create jobs if they have marketing freedom, whether that’s through a voluntary Canadian Wheat Board or on an open market,” according to the source.

“To do that, it’s expected that the legislation will allow the government to support the Wheat Board’s transition for up to five years, when they will be expected to transition to full private ownership.”

Financial assistance seems likely to be included in the government’s support plan, and the Wheat Board called earlier in the day for start-up capital and a reserve fund worth a total of C$425 million ($417 million).

The CWB also wants regulated access to grain-handling elevators and port terminals, since it owns none, and continued government guarantees of its borrowings.

Viterra Inc, Richardson International Ltd and Cargill Inc own the largest networks of grain-handling elevators and port terminals in Western Canada.

Canada is the world’s biggest exporter of spring wheat, durum and malting barley.

($1=$1.02 Canadian)

Reporting by Rod Nickel; editing by Rob Wilson

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