World Grain - November 2012 - 40

FEATURE: ‘NEW’ CWB FORGES AHEAD

The Canadian Wheat Board is headquartered in Winnipeg, Manitoba, Canada. Photo courtesy of the CWB.

ensure the organization in its new business model does not carry the liabilities of the old model. What remains for White to work with is a smaller group of people who understand wheat and barley farming and global marketing as well, or better, than anyone else in the business, the ability to “pool” farmers grain revenues, nearly C$350 million in federal funding to help the board adjust to the new environment and, most importantly, the loyalty of many farmers in Western Canada. Even White, who was at the CWB helm before, during and after the politi40

cal storm, admits that the long-term survival of the present board is something that “remains to be seen.” STILL LOYAL TO THE BOARD Loyalty to the CWB was something that was as much a part of farming on the Canadian Prairies as spring rain. It was born through a mistrust of the private grain trade brought by an agrarian revolution that convinced many Prairie farmers that private corporations skimmed off proﬁts from the grain that came from producers’ ﬁelds, leaving farm families with barely enough to live on.

For them, the alternative of having an independent government agency, backed by the Canadian government, was a reasonable alternative to a loss of their ability to ﬁnd buyers and spend valuable time trading wheat, barley and (at that time) oats. While some of this mistrust has disappeared over the years, much remains, handed down from father to son. To a large extent it is this historical feeling of loyalty to the board and the feeling that the board can provide solid business and risk-management options, such as grain “pooling,” that should attract a large portion of Prairie farmers to use the services of the “new” CWB. It will be up to board management to prove to grain farmers that they can provide better prices, more ﬁnancial security and a sense that they are working solely on behalf of farmers and not corporate investors that will bring either success or failure to this new experiment north of the Canada/U.S. border. Asked about the CWB’s chances for survival, White said he believes the board has several tools still in its possession that should appeal to Prairie farmers. “I think farmers now need to understand the risks of marketing their wheat in Canada,” he said. “Before, the pooling system that was there for all of the participants took care of all of levels of risk, from grade spread risk to protein risk to payment risk to all sorts of basis risks. Now the farmer needs to make his own price, just as he does in the U.S.” White said the pooling process now available to farmers will be similar to what existed prior to the change, but with a different quantity of grain and with commercial arrangements. While it’s true that not all farmers will want to enter into a pooling arrangement for their grain and will prefer to market it themselves at what they believe is a reasonable spot price, the volume of grain in the pools will drop. However, the CWB has prepared for this eventuality by opening its doors to canola contracts for the ﬁrst time. Today, canola represents almost half

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World Grain - November 2012

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