* Ag minister says industry supports 2012 date for change
* Ritz says CWB still has a role to play
* CWB monopoly on western grain in place since World War 2
* Shares of grain handler Viterra surge
(Adds Wheat Board comment and Viterra share move)
By Randall Palmer and Rod Nickel
OTTAWA/WINNIPEG, May 18 Canada's Conservative
government will likely introduce legislation this autumn that
will end the Canadian Wheat Board's marketing monopoly on wheat
and barley in 2012, the agriculture minister said on
Western Canada's grain industry has operated since World
War 2 under a monopoly that forces farmers to sell wheat and
barley to the board, unlike other crops such as canola.
Farmers who oppose the Wheat Board have long urged the
government to end the world's last major agricultural monopoly,
saying they want the freedom to find the best possible prices.
Other farmers who support the CWB say the clout of the its
single marketing desk brings them the best, most reliable
The legislation would take effect in August 2012, the
beginning of the 2012-13 crop marketing year, said Agriculture
Minister Gerry Ritz, shortly after Prime Minister Stephen
Harper reappointed him to the post in the new cabinet.
"Everyone recognized the complexity of this," Ritz told
reporters. "It is going to take a certain amount of work with
(industry groups and farmers). All has to dovetail in to make
the farm gate stronger."
Shares of Canada's top grain handler, Viterra VT.TO, rose
in Toronto after Ritz's comments, ending up more than 2
Earlier in the day, Viterra Chief Executive Mayo Schmidt
said ending the monopoly would speed improvements to Canada's
grain-handling system. [ID:nN18254863]
After the Conservatives won a parliamentary majority in the
May 2 election, giving them the power to end the monopoly
without help of other parties, the Wheat Board has dusted off
old contingency plans, said its elected chairman, Allen Oberg,
who farms in Alberta.
Those scenarios include becoming a voluntary grain pool;
operating in an open market for barley and a single desk for
wheat if the government stages the monopoly's breakup; and a
structure in which farmers are shareholders, Oberg said.
Without grain elevators and port terminals, however, Oberg
said the Wheat Board would be hard-pressed to compete with
handlers such as Cargill, Viterra and Richardson
"It's hard to say what a new structure might look at,"
Oberg said. "It could survive, I suppose, but it would be a
much smaller organization."
Ritz said the government would look at all of the CWB's
roles in considering its future.
"But at the end of the day, certainly there is a role for
the Wheat Board to play," Ritz said. "We'll have to work out
just exactly what that is."
He said the planned timing of the change has the support
of industry groups.
The chief executive of Cargill's Canadian subsidiary told
Reuters last week that the grain industry should have at least
six months' notice of a change, which he said would logically
take effect in August 2012. [ID:nN11266863]
FARMERS ON BOTH SIDES
Farmers who support the board are angry that the government
plans to end the monopoly through legislation, rather than
allowing the farmer-elected board of the CWB to decide its
direction, said Kevin Wipf, executive director of the Canadian
office of National Farmers Union.
"It's going to mean the loss of significant marketing
power," he said. "One thing farmers agree on is this is an
issue to be decided by farmers. (Government) better be prepared
to face the discontent they'll see in the countryside."
The legislation would likely amend the Wheat Board Act, a
federal law that governs how the CWB operates.
Stephen Vandervalk, president of the Grain Growers of
Canada, said his group supports the government's approach to
ending the monopoly.
"It's going to mean a lot better cash flow, it's going to
mean a lot more certainty as far as contracting and
deliveries," said Vandervalk as he seeded his farm near
One of the chief criticisms of the monopoly system is that
farmers get an initial payment from the CWB but must wait for
full payment from the pool seller.
Vandervalk said an open-market system may also spur
construction of more processors in Western Canada to turn
barley into malt and to mill wheat.
While promising to end the CWB's monopoly on Western
Canadian grain sales, Ritz reiterated on Wednesday the
government's support for supply management of other Canadian
farm industries such as dairy.
(Reporting by Randall Palmer and David Ljunggren in Ottawa and
Rod Nickel in Winnipeg. Writing by Rod Nickel; editing by Peter
Galloway and Rob Wilson)