The Western Canadian Wheat Growers Association opposes the inclusion of canola marketing under the Canadian Wheat Board (CWB), until such time as the CWB is made voluntary and is divorced from government. The Wheat Growers are responding to an initiative by the Manitoba Canola Growers Association to gauge farmer support for voluntary canola marketing through the CWB.
“The threat of trade action is simply too great,” says Kevin Bender, President of the Wheat Growers. “Placing canola under the CWB, even on a voluntary basis, would jeopardize the phenomenal growth and success we’ve seen in the canola industry.”
The Wheat Growers note the CWB has been subject to more than a dozen trade actions over the past two decades. While the canola industry has faced various trade irritants, no trade action has ever been launched against Canadian canola on the basis of the manner in which it is marketed (i.e. the open market).
“We’ve seen tremendous private investment in canola processing and research under the open market,” says Rolf Penner, Manitoba Vice President of the Wheat Growers. “Marketing canola through a government board puts this investment at risk.”
The Wheat Growers maintain that placing canola under the CWB would invite trade action, given that the federal government currently guarantees all borrowings of the CWB. Even if the government did not guarantee the initial payment or borrowings related to the canola pool, the potential for cross-subsidization from wheat and barley pool accounts and/or the government-backed contingency fund would invariably lead to trade challenges, particularly from the United States. The value of canola seed, meal and oil exports to the U.S. currently exceeds $1 billion.
While opposed to the inclusion of canola under the CWB as presently constituted, the Wheat Growers support the voluntary marketing of canola by the CWB if the following conditions are met:
1) The marketing of wheat and barley through the CWB is voluntary.
2) All CWB financial ties to government, including the guarantee of borrowings and the initial payment are eliminated.
3) The CWB is transformed into a private enterprise, whether that’s a co-operative or some other business structure.
The Wheat Growers note there is nothing currently stopping canola growers from forming a voluntary pooling marketing organization, and encourage farmers who support this concept to concentrate their efforts in that direction. Three companies in Australia, including a producer co-operative, currently offer voluntary canola pools so the precedent is well-established.
