Declining grain prices, the Conservative government’s ongoing minority status and the current global financial crisis may help protect the Canadian Wheat Board’s single marketing desk “for a while longer,” a U.S. ag agency’s report suggests.
The Global Agriculture Information Network (GAIN), operated by the U.S. Department of Agriculture’s Foreign Agriculture Service (FAS), noted in a recent weekly report on Canadian agriculture that the current Conservative government on Oct. 14 “failed for the third time to win a majority and therefore still needs the support of at least one opposition party to pass legislation.”
With all three opposition parties having expressed support for the CWB and opposing the Conservatives’ recent plans to deregulate the single desk for barley, legislating an end to the CWB’s single desk for Prairie barley or wheat is unlikely, the report suggested.
“Aside from the government being too busy trying to navigate the global financial crisis to make dismantling the CWB a priority, the popularity of the (CWB) and its single-desk seller status tends to increase in times of global economic slowdowns,” the report said.
The report acknowledged the current CWB director elections may potentially see the number of “pro-monopoly” directors on the CWB board move from a “slim majority” to a minority, and if that shift were to happen, “the board would likely take the (CWB) in a more open-market direction.”
However, the report cited “industry analysts” as saying a shift in the makeup of the board to a pro-deregulation stance is “less likely to occur now than if elections had taken place in the spring when grains prices peaked.”
With the world economy slowing and with difficulty expected in marketing current substantial harvests due to the current credit crisis, the FAS report said “a majority of producers may feel more secure selling through the CWB, thereby limiting the likelihood of pro-free market directors being elected in the November director elections.”
The report was prepared for USDA by FAS agricultural specialists at the U.S. Embassy in Ottawa.