World Grain - February 2015 - 40

FEATURE: CWB TAKEN OFF LIFE SUPPORT

(Continued from page 36)
and operating what remains of the board
have been circulated.
The list of companies/organizations
that have expressed an interest has not
been revealed. However, one group,
Farmers of North America, based in
Saskatoon, Saskatchewan, Canada,
support from farmers/shareholders -
roughly C$250 million - to make an
offer for the board.
An offer by a group of farmers wanting
to launch a Western Canadian grain handling company was nothing new in the
west and is, in fact, an ingrained event
in the history of the Prairie Provinces.
Low grain prices and mistrust of the existing grain companies and railways at
the beginning of the 20th century led to
an agrarian revolution that eventually
resulted in the establishment of farmer-owned grain co-operatives, such as
Saskatchewan Wheat Pool and United
Grain Growers, with thousands of loyal
farm customers and a powerful political
network throughout Western Canada.
But even though the Saskatoon group
was following a well-traveled path in
proposing the takeover of the board by
farmers, its proposal was turned down
Without providing reasons for the
farmer-based proposal was rejected,
but it was probably because the board
(read federal government) was not interested in establishing another small,
farmer-owned grain handling company
in Western Canada's present marketing
environment that is now controlled primarily by two multi-nationals, Swissbased Glencore International (Viterra)
and Minneapolis-based Cargill and one
private long-standing Canadian company, Richardson International, owned by
the Winnipeg, Manitoba, Canada-based
Richardson family.
Most likely, the board felt that in this
league a small farmer-owned company
would have little chance of survival and
of competing in international markets.
40

pany that will work with the CWB to
build a company capable of meeting the
competition that now exists in Western
Canada and is interested in handling and
marketing not only wheat and barley,
but the wide diversity of crops that are
now being grown in the west.
Again, without knowing which companies have responded to the board's
who the contenders might be, but the list
probably includes:
* Archer
Daniels
Midland,
Decatur, Illinois, U.S., with worldwide
operations that recently attempted to
purchase GrainCorp Australia. At the
present time this company leads in
speculation on the street.
* Cargill Canada, Minnetonka,
Minnesota, U.S., already well established in Western Canada and the
company that purchased the former
Australian Wheat Board.
* Louis Dreyfus, French-based with
worldwide operations. Already established in Canada with 10 elevators and
an oilseed crushing plant.
* Bunge, White Plains, New York,
U.S., that already has oilseed crushing
operations in Canada and facilities in 40
countries globally.
* CBH Group, an Australian-based
farmer-cooperative.
* CHS Inc. a U.S.-based company
that already owns over 15 retail stores in
Western Canada.
* Olam International, Singaporebased with operations in 65 countries
and 24 facilities in the U.S.
* Marubeni Corp., Based in Japan
that recently entered into a joint venture
with U.S.-based ADM
As might be expected, the controversial move by the federal government
has led to at least one class-action suit
by farmers. In a suit launched February
2014, the farm group, "Friends of the
Canadian Wheat Board," estimated the
CWB owes Western farmers roughly
C$17 billion.
In the Supreme Court of Canada
Stewart Wells, chairman of the group,

said the value of ongoing business, the
assets including a contingency fund the
board had set aside, and the misallocation of funds during the transition period
amount to a $17 billion loss to Western
farmers. He went on to say that "The
Friends of the Canadian Wheat Board"
believe the brand and the good name of
the farmer-owned CWB is also a form
of property built and paid for by farmers, and the court should address this
"very substantial loss."
In a recent prepared statement, the
CWB said the assets are not going to be
"given away" as claimed and "Our objectives are to develop a strong and viable grain-handling company in Canada
that can compete with the best in the
business and to give farmers an opportunity to have an ownership stake. CWB
is not being sold or given away. We are
securing an investor to partner with farmers to ensure there is a strong and viable
CWB for today and the next generation."
However, one thing not mentioned
is the fact that Canadians will participate in a federal election Oct. 19, 2015.
While it is supposed to be the country's
is already beginning and there is a possibility it could happen much earlier. An
Angus Reid Global poll in early 2015
indicated the Conservative Party of
Canada, which is now the government,
led with 35% of decided support among
"likely voters" while the Liberal party
stood at 32% and the New Democrats
At this point it's a close race. What either the Liberals or NDP would do with
the wheat board issue if they were to gain
power is unknown, but there is a good
for the board could be shelved before the
marriage is consummated.
Based in Vancouver, British Columbia, Canada,
Leo Quigley writes for a variety of national
and international publications specializing
in agriculture and transportation. He can be
reached at Quigley@dccnet.com.
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inquiries to worldgrain@sosland.com. For reprints of
WG articles, e-mail reprints@sosland.com.

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World Grain - February 2015

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