Newsroom
2006
Farmer Power in the Global Marketplace: CWB's Vision for the Future
August 1, 2006
Winnipeg - A new vision for the CWB would see a powerful global player - fully controlled by Prairie farmers, with commercial businesses, partnerships or joint ventures throughout the supply chain.
"The innovative path chosen by our farmer-controlled board of directors builds on the initial steps taken in 1998 to turn the CWB over to Prairie producers," said CWB board chair Ken Ritter, a farmer from Kindersley, Saskatchewan. "It significantly advances farmers' ability to control their own destiny."
The vision, entitled Harvesting Opportunity, would leverage the single desk to maintain a strong Canadian brand, generate market premiums and champion farmers' interests throughout the supply chain. The new business model would be comprised of a world-class grain-marketing corporation, independent of government, with a venture-capital subsidiary to generate additional value for farmers from commercial investments. Harvesting Opportunity has been posted at www.cwb.ca.
"This is a plan that takes advantage of our competitive strengths, creates farmer power in grain handling and transportation and builds a realistic platform for farmer investment and benefit in value-added activities on the Prairies, in Canada and overseas," Ritter said.
Harvesting Opportunity is the result of more than a year of research and deliberation by the CWB board and a number of experts, both internal and external to the CWB, who reviewed matters ranging from business and capital implications to governance and taxation issues.
Its elements include:
- creation of a non-profit corporation, without share capital, to operate the single desk marketing structure and pool accounts for the benefit of its farmer-owners;
- creation of a separate, wholly-owned subsidiary to serve as an investment holding company which would invest in commercial business activities in accordance with the CWB's new strategic direction;
- governance by a board consisting of 10 elected farmers, four directors appointed by the board and the President and CEO, also chosen by the board;
- creation of a new CWB electoral commission with authority to make regulations in respect of the electoral process and to resolve disputes; and
- creation of a special oversight committee to oversee the required capital base -- an infusion of approximately $1.5 billion from the federal government in lieu of its existing guarantees on farmers' payments and CWB borrowings.
In a spring 2006 survey, western Canadian farmers indicated strong support for initiatives that would expand the CWB's role. For example, 70 per cent supported CWB investment in joint processing ventures with Canadian producers, while a majority also supported such investments in other countries. In addition, 73 per cent supported the CWB investing in storage or handling facilities on the Prairies or at Canadian ports.
Ritter acknowledged the federal government's desire to move in a different direction on grain marketing. He said the board of directors has shared its vision with the federal government, which wants to eliminate the single desk, and hopes to engage in a constructive dialogue in the near future.
"It is important to develop a resolution that will be acceptable to farmers. We look forward to working with the Minister on this. Our board is open to any resolution that provides for a farmer-controlled, Canadian-owned grain industry that ensures farmers get a fair price for their grain."
Change is necessary, Ritter said, to strengthen Prairie farmers' competitive position in the highly consolidated world of international grain marketing -- where four large companies control 70 per cent of the global wheat trade.
"The grain marketing debate is no longer one of freedom, it is one of financial survival," he said. "This organization needs to evolve and meet the challenges of today's marketplace in order to achieve its singular goal - which is to put as much money as possible into the pockets of Prairie grain farmers."
Controlled by western Canadian farmers, the CWB is the largest wheat and barley marketer in the world. As one of Canada's biggest exporters, the Winnipeg-based organization sells grain to more than 70 countries and returns all sales revenue, less the costs of marketing, to Prairie farmers.
A media teleconference interview opportunity with Mr. Ritter and CWB President and CEO Adrian Measner will take place today at 1 p.m. CDT (Winnipeg time). News media are invited to register by calling Maureen Fitzhenry at the number below before 12 p.m. CDT.
Non-media are invited to listen to the teleconference at www.cwb.ca via live Webcast.
For more information, please contact:
Maureen Fitzhenry
CWB media relations manager
Tel: (204)-983-3101
Cell: (204)-479-2451