Barley, Free at Last

Commentary, Marketing Boards, Rolf Penner

Except for a few sticks-in-the-mud, no one doubts any longer that Prairie farmers want choices in how they market their barley. By restoring dignity and property rights to growers, the new policy will bring clear benefits, not least a declaration that, when it comes to barley, we are open for business.

The much anticipated plebiscite found that a majority (62%) of farmers voted in favour of marketing freedom. Three of four participating provinces declared that, with the fourth, Manitoba, virtually split down the middle, at 49.4%. Albertans were the most strongly for choice, with 78.6% of the vote. The results are almost identical to those contained in the Canadian Wheat Board’s (CWB) own producer surveys in 2005 and 2006.

Federal agricultural minister Chuck Strahl heard the message loud and clear and intends to move soon to ensure that farmers have the freedom to market their barley to whomever they wish, including the CWB, in the coming crop year. He should move quickly. Farmers are finalizing their seeding plans and marketing strategies for the coming year, and they have just enough time to incorporate marketing choice for barley into them.

A big benefit farmers will see right away is the ability to know the price they will receive for their barley before they put it in the ground. As with other non-board crops, they can now lock in a profit and a delivery period of their choosing. That’s a better option than having to guess when they might be able to haul it in and what they might finally get for it many months down the road. It gives them the control and certainty they need to be successful in today’s fast-moving markets.

Barley is now poised to become the “corn of the north.” U.S. subsidies for ethanol are sucking corn away from feed markets and creating shortages. Western Canada could fill that demand with barley and reverse the longstanding trend of importing American feed grains to feed our livestock.

Benefits will also be felt beyond the farm gate. Western Canada now has the potential to become the malting capital of North America. The major impediment – maltsters couldn’t contract directly with farmers for barley, and had failed to secure adequate supplies from the CWB – has now been removed. The Prairies have significant advantages for malting barley, among them an ample supply of high-quality water and lower building and operating costs. In recent years we’ve lost malting capacity to the Americans, but there’s now a much better chance for new investment and the creation of many new jobs.

Opportunities also exist for the CWB to continue as the marketer of choice for many farmers. With more barley grown, a good share of the tonnage should find its way through the Board’s hands. But to remain relevant, the agency will have to change. It needs to regard itself as a “value-chain deal maker,” not as a direct competitor with grain companies. The positive relationships that the CWB has with end-use customers will allow it to continue as an effective marketer in both international and domestic markets. And the CWB has a relationship of trust with many growers. All of these relationships have value on which the CWB could capitalize.

The current directors of the CWB need to appreciate that the war is over. Choice won, and instead of continuing to fight both farmers and government at every turn, they must either change their tune or get out of the way. A proper respect for farmers’ property rights and for the democratic process just conducted dictates that this is not the time to waste more farmers’ money on high-priced Toronto lawyers looking for legal loopholes. It is time to respect farmers’ wishes. Period.

The implementation of marketing choice for barley is sound public policy, a rarity for a federal government that has grown too large and too intrusive. Harper’s government and Chuck Strahl deserve congratulations for making good on their election promise.

Free barley, free at last.