Newsroom
2007
CWB director appeals for protection of risk management for farmers
April 18, 2007
Saskatoon – CWB farmer-elected director Ian McCreary today appealed to the Commons Standing Committee on Agriculture to protect farmers’ risk management by ensuring legislative support for farmer-run marketing organizations to continue to work effectively.
Effective risk management requires tools that give producers power in agricultural markets and the grain trade – not just government income-support programs, McCreary told the committee, currently touring Western Canada.
“I am not talking more money here,” said McCreary, who farms near Bladworth, Saskatchewan. “I am not asking for more government programs. What is needed is a commitment that marketing organizations like the CWB – that establish some balance in the market and provide grain producers with solid price risk management options – be enabled to exercise the powers that make them effective.”
Risk management is crucial for farmers because of the extraordinary production and market-based risks they face, he said. “The economic or commercial environment in which grain producers find themselves is one that can be best characterized as a power struggle, where you have a limited number of very large, powerful entities one the one hand and farmers on the other. Unfortunately, grain producers are in an environment where they exercise relatively little control over the factors that affect the profitability and sustainability of their enterprises.”
McCreary cited high input costs, consolidation of the grain handling industry, captivity to railways, the power of a handful of major grain merchants in the international marketplace and the influence of foreign governments in setting the rules of the global grain trade. He said the CWB, with its current powers as a single seller of wheat and barley, is a positive force in such an environment, one that can give Prairie farmers a lever to exercise influence over their environment and manage their business risk.
As examples, he cited CWB efforts for better railway service and rates, support for producer car facilities as an alternative to the existing grain handling system, market diversification and branding of western Canadian wheat and barley as a consistent, high-quality product.
McCreary also pointed to pricing tools available through the CWB to help farmers manage business risk, such as price pooling and –more recently – unique options that enable farmers to customize their pricing strategies if they need more income certainty and cash flow.
He called on the committee to establish how, in the absence of its single-desk powers, the CWB could continue to effectively provide the same risk management tools. He asked what the committee will do to ensure the government provides equivalent risk-management offerings to farmers if it proceeds with its policy for a “voluntary” CWB.
“It is my hope that, in trying to do something real to help the farmers of Western Canada better manage their risk, the government may revisit its position (on the CWB).” McCreary’s presentation has been posted on the CWB Web site at www.cwb.ca.
Controlled by western Canadian farmers, the CWB is the largest wheat and barley marketer in the world. One of Canada’s biggest exporters, the Winnipeg-based organization sells grain to over 70 countries and returns all sales revenue, less marketing costs, to farmers.
For more information, please contact:
Maureen Fitzhenry
CWB media relations manager
Tel: (204) 983-3101
Cell: (204) 227-6927