Thank you very much, Mr. Chair.
I would also like to thank the members of the committee.
I'm pleased to be here today to speak to the Marketing Freedom for Grain Farmers Act and the contribution of the working group on marketing freedom.
As the chair has indicated, we have members of the working group here today. I served as the chair, and the other members are here representing the working group. Greg Meredith served as head of the secretariat.
If you will allow me, Mr. Chair, I will just make some brief opening remarks about the work, mandate, principles, and findings of the working group. I understand we've distributed as background to members the working group report itself, these remarks, as well as some charts that are used to explain how Bill C-18 works.
Throughout the summer I had the honour to chair this industry working group, which focused on how the system might transition from the current administered system to an open market that includes voluntary marketing pools. The working group had 11 meetings in the space of an intensive period of two months, including subcommittee meetings on specific issues such as a check-off program for research, producer cars and shortlines, and the information needs of farmers.
Over 50 stakeholders made a contribution, and 21 submissions were received. Beyond the working group there have been many bilateral meetings involving the Honourable Gerry Ritz, other officials, and me. For example, I met with ICE Futures Canada on futures contracts, and I have also met with the Winnipeg Chamber of Commerce and the Business Council of Manitoba on the economic impacts of these changes. The minister is always meeting farmers and stakeholders, while the department has recently completed rounds of consultations with farmers and stakeholders on its Growing Forward policy framework.
In terms of the mandate of the working group, it was announced in mid-July, and we were tasked with preparing a report for Minister Ritz by mid-September. The working group--and I believe you have a list of all the members--consisted of private sector participants and a government secretariat including officials from my department as well as Transport Canada. The working group was asked to assume that all grains would be removed from a monopoly by August 2012; that the board would propose a business plan to continue with CWB, the Wheat Board, as a voluntary marketing entity; and that the system would adjust to marketing choice.
The mandate was to address the following: access to elevators, rail, and ports; access to producer cars; organization and funding of market development and research activities for wheat and barley; delivery of the advance payment program; and any other business-related transition issues that concern the grain-handling and transportation system.
As chair of the working group, I would like to emphasize the word “system” in this last point. Our work was very much focused on this concept and on how to make the supply chains work better. Other issues, as you can see in the report itself, include price discovery, farmer information requirements, and issues related to a voluntary wheat board.
As its discussions took place, the working group developed principles to provide a framework for assessing the transition to a new voluntary marketing system. I refer you to those in the working group report at the beginning in the opening section. I won't go through the details of all six, but let me give you a few highlights.
The first principle identified by the working group was all about predictability and certainty. We heard again and again from farmers and stakeholders who met with us that they had a desire for a smooth transition with a clear understanding of how implementation will occur and when. I can't reinforce enough the importance of this principle and the importance of the principle for the working group and its report.
In addition, there are three other principles that articulate the growth opportunities relating to improved efficiencies, more innovation, and value added.
Finally, two principles focus on the need for an integrated supply chain in which commercial arrangements are based on transparent and timely data and which emphasizes the importance of improving service to domestic and export markets.
In terms of findings, the working group agreed that overall we should give a competitive system a chance to work, one that includes a voluntary pooling wheat board--in other words, a dual marketing system. This, we said, would encourage a more integrated supply chain, boost sales, ensure transparency in the marketing of wheat and barley, and offer producers the option of using pools or spot prices.
We see these as the opportunities, and we also discussed a lot of challenges in preparing our report.
In fashioning our eight recommendations, the working group observed that all non-board grains are grown, marketed, and transported efficiently in competitive, open markets. The same farmers who supplied board grains already thrive producing non-board crops. There is overwhelming evidence that farmers in the grain supply system are more than capable of dealing in open markets.
Members did want government to monitor closely how the system will work for access to ports and inland terminals and access for producer cars and shortline rail.
It will be important to ensure that any competitive behaviour does not affect the workings of the new system, especially for farmers and smaller grain companies, including the new Wheat Board.
Minister Ritz has already taken steps on two of the recommendations by giving the responsibility for the delivery of the advance payments program to the Canadian Canola Growers Association and also by providing information to farmers on the new bill. Certainly there is more work to continue on these information aids, but we have started.
Working group recommendations are consistent with Bill C-18. The bill reflects the open market approach of the working group, including the desire to monitor rather than to regulate. Bill C-18 specifically provides for forward contracting and for a levy for the research organizations--the Canadian International Grains Institute, the Western Grains Research Foundation, and the Canadian Malting Barley Technical Centre--both of which are areas of recommendation in the working group report.
Perhaps most important, Bill C-18 provides certainty and predictability, a recurring theme, as I mentioned earlier, in terms of the working group and what I've heard from every farmer and stakeholder. The bill implements an open market by August 1, 2012, and in that way it gives the CWB--the Wheat Board--sufficient time to prepare a business plan for a new viable entity and with board guarantees in the interim. This of course is over the five-year transition period.
In the dual marketing system, farmers who want to pool can, and farmers who want to use the new tools have that option too.
Let me conclude in the way the working group report does, with optimism that farmers and other players can meet both the opportunities and challenges of the new system.
I look forward to your questions on the working group report and Bill C-18.
Thank you very much.
