THURSDAY, AUGUST 18, 2011
VOL. 89 | NO. 33 | $3.75
Changing fortunes of wheat
SERVING WESTERN CANADIAN FARM FAMILIES SINCE 1923
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SWATHING SUMMER GOLD AT SUNSET
AGRONOMY | OPERATING COSTS
Fertilizer to climb, gradually Companies try to avoid 2008 scenario where farmers stopped buying BY ROBERT ARNASON BRANDON BUREAU
Kenny Hofer, from the High River Colony, swaths spring wheat late into the evening in a field south of Blackie, Alta. The warmer temperatures have allowed farmers to work later as harvest gets underway in some areas. | MIKE STURK PHOTO
Farmers should prepare for higher fertilizer prices, but nothing like they experienced in 2008. The latest crop production estimates from the United States Department of Agriculture will likely push nitrogen prices higher during the next couple of months, says a fertilizer industry analyst. But in the longer run, prices won’t jump rapidly like they did three years ago because supply is growing faster than demand. David Asbridge, president and senior economist with NPK Fertilizer Advisory Service, said the USDA estimates released Aug. 11 will encourage farmers to plant more corn next spring. That will boost demand for ammonia and urea. access=subscriber section=news,none,none
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GRAIN MARKETING | SINGLE DESK SEE FERTILIZER TO CLIMB, PAGE 2
Feds to put value on CWB end
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OTTAWA BUREAU
After years of vowing to kill the Canadian Wheat Board monopoly and months after setting Aug. 1, 2012, as the execution date, the Conservative government wants to find out what it will cost. Agriculture Canada is advertising for an audit to prepare two reports that determine how much taxpayers will be on the hook for winding down the wheat and barley monopoly. The winning auditor will be paid between $500,000 and $1 million to figure out potential liabilities, including employee severance and pension costs, potential legal costs for broken long-term contracts and other costs as well as offsetting CWB assets. The call for bids was issued Aug. 11 and will close Aug. 25. For critics of the Conservative plan, the call for a financial accounting is proof that the Conservatives made the CWB decision based on ideology and without any financial analysis of whether it made economic sense.
A CWB analysis reviewed by the accounting firm KPMG concluded the costs will be in the hundreds of millions of dollars. During a summer meeting, board officials told Grain Growers of Canada it could be in the $300 million range. “The government’s fanaticism to abolish the Canadian Wheat Board may cost us hundreds of millions of dollars, never mind the impact on the well-being of prairie farmer incomes,” New Democratic Party CWB critic Pat Martin said. “The taxpayers may be on the hook for hundreds of millions of dollars to fulfill the ideological wet dream of (prime minister) Stephen Harper.” CWB chair Allen Oberg said it is clear the government has not calculated the costs of ending the monopoly or how the board could transition into a competitive market player. “It’s fair to say it’s going to be in the hundreds of millions of dollars and this is something we don’t think farmers should pay for and the federal treasury is going to be on the
hook for that,” he said from his Forestburg, Alta., farm. He said the government should wait for the early September results of a CWB-conducted farmer plebiscite to see what the majority of farmers want. Oberg said none of the scenarios studied by the CWB show the end of the single desk returning as much value to farmers as the current model. “This really is in the government’s hands.” Critics also saw language in the call for tenders that they say is a glimpse of the real Conservative agenda. The call for bids does not use the public Conservative language about ending the monopoly, but hoping the CWB survives. It says the objective of the audits is to “provide assurance that the financial reporting is up-to-date and that all financial transactions have been accurately recorded in order to determine the potential financial impact of the repeal of the Canadian Wheat Board Act and the dissolution or winding up of the CWB.” access=subscriber section=news,none,none
Legislation to repeal and replace the CWB Act will be introduced once Parliament returns in mid-September. “That language is a far cry from the Conservative public line,” said Martin. “Clearly the government is contemplating more than just a voluntary CWB. It is contemplating the elimination of it.” At Grain Growers of Canada, which supports elimination of the single desk, executive director Richard Phillips said it was prudent for the government to wait to do a financial impact study since financial implications and conditions change. “I’m not sure a review done earlier would be very valid today with new information,” he said. He suggested some of the costs for employee severance and pension liabilities could be limited by giving the board’s 400 employees priority for other government jobs access=subscriber section=news,crops,none
SEE FEDS TO ASSESS VALUE, PAGE 2
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AUGUST 18, 2011 Return undeliverable Canadian addresses to: Box 2500, Saskatoon, SK. S7K 2C4 The Western Producer is published in Saskatoon by Western Producer Publications, which is owned by GVIC Communications Inc. Publisher, Larry Hertz Publications Mail Agreement No. 40069240; Registration No. 10676
Termination costs | Critics say Ottawa’s call for auditors proves decision is based on ideology BY BARRY WILSON
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