Canadian Wheat Board rejects proposal for voluntary pool

images (2) WINNIPEG, Manitoba, Aug 26 (Reuters) – The Canadian Wheat Board would not be viable as a voluntary marketer of farmers’ grain without regulated access to country elevators and export terminals, the CWB’s chairman said on Friday, in rejecting a suggestion from one farmer group.

The Western Canadian Wheat Growers Association, which has long called for an end to the CWB’s monopoly, proposed on Thursday a new, voluntary model for the board in which it would be owned directly by farmers.

"Turning ownership of the CWB over to farmers will be key to its success," said Wheat Growers director Mike Bast.

The proposal included no regulated access to the grain-handling system for the CWB, but suggested it issue shares to farmers in the new company and start it off with up to C$22 million ($22.4 million) in capital. The government would continue to guarantee the CWB’s initial payments to farmers and, for three years, its borrowings.

"To me, it looks like it was hastily put together," said Wheat Board chairman Allen Oberg, after a news conference giving the CWB’s crop forecast. "I’d have to look at it more, but at first glance I would say it doesn’t have much of a chance."

The Wheat Growers’ proposal suggests the CWB arrange for elevator and terminal space on a contractual basis with grain handlers.

That’s "a major problem," Oberg said, since the only way to resolve disputes would be through the courts.

The Wheat Board has said it doubts grain handlers – led by top handlers Viterra Inc (VT.TO), Richardson International Limited and Cargill Inc [CARG.UL] – would co-operate with the CWB if it becomes a competitor, although some handlers have said they would work with a new entity.

The Conservative government says it will pass legislation this autumn to end the Wheat Board’s marketing monopoly on western wheat and barley in August 2012.

The change will allow Prairie farmers to choose whom they sell their crops to for the first time since World War Two.

The Wheat Board is not going to draft a post-monopoly business plan that could be a "recipe for failure," Oberg said, until Ottawa agrees to conditions such as elevator access and a capital base.

Canada is the world’s top shipper of spring wheat, durum and malting barley.

"Whatever happens in terms of change it’s not the CWB that we know today, it’s a different style of organization, and we have to look at how viable that can be," said CWB Chief Executive Ian White

http://uk.reuters.com/article/2011/08/26/wheat-canada-monopoly-idUKN1E77O16220110826?rpc=401&feedType=RSS&feedName=governmentFilingsNews


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