Mr. Speaker, as a member of Parliament who represents the rural constituency of Dauphin-Swan River, as a grain farmer and as a strong supporter of the Canadian Wheat Board, I am more than pleased to speak on behalf of Bill C-72, the amendments to the Canadian Wheat Board Act.
This legislation is the result of recommendations made last summer by the Western Grain Marketing Panel. The Minister of Agriculture and Agri-Food Canada commissioned the Western Grain Marketing Panel to hold extensive hearings and to come up with a set of recommendations to reform western grain marketing so the system can function more effectively.
After an exhaustive consultation process involving countless letters, phone calls, faxes, E-mails, petitions, public and private meetings, demonstrations, parliamentary debates, surveys and the hard work of the panel, it is clear that most farmers do not hold extreme irreconcilable viewpoints.
This was evident in the recommendations of the panel that, along with views of members of Parliament and provincial governments, helped the Government of Canada to decide on the contents of the bill we are debating today.
I know there are differences of opinions among farmers and parties and that in the end one cannot make decisions that will please everyone.
Indeed, given the historic fractiousness of the western grains industry and the deep divisions that exist between those farmers who hold the most extreme views on grain marketing, it is not possible to satisfy all sides.
I believe most farmers want the board retained but with some degree of change. They want the board to be more contemporary in its structure. They want more accountability. They want a bigger say in how things are done. They want more responsiveness to changing producer needs and changing producer opportunities. They want more flexibility in board operations. They want a greater cash flow from their grain as quickly as possible. And, of course, they want to minimize their vulnerability to trade attacks or trade limitations imposed by other countries.
On the other side of the equation, most farmers also value the proven strengths of the Canadian Wheat Board, its global reach, its market clout, the sheer size and skill to go head to head with the world's largest and most powerful grain traders and win, the ability
to minimize the effects of the European and American trade distorting export subsidies, the board's world leading market intelligence and weather surveillance systems, and its sophisticated and comprehensive before market and after market customer services.
The Canadian Wheat Board currently serves more than 100,000 prairie farmers as a single desk marketer for wheat and barley for export and domestic human consumption. Its annual sales revenues are close to $5 billion, making the board one of Canada's most significant business enterprises. It is the country's fifth largest exporter and Canada's biggest net earner of foreign exchange. It carries on business in more than 70 countries and has earned for itself and Canada a very positive reputation in the eyes of its global customers.
However, we cannot rest easy about these achievements. There is a new world out there that requires regular change in business methods to cope with changes which this legislation addresses.
The changes contained in this legislation fall into three broad categories. The first category includes changes related to the Canadian Wheat Board's structure, governance and accountability. The second includes changes related to more flexible wheat board operations and improvements in cash flow. The final category includes changes related to the Canadian Wheat Board's marketing mandate and the empowerment of farmers.
I would like to discuss the second group of changes in greater detail. To backstop cash purchases and to help the wheat board manage adjustment payments quickly, the board will be allowed to establish contingency funds as a financial cushion. The Canadian Wheat Board is currently limited to purchasing grain from farmers in elevators or in rail cars at the initial payment and subsequently issuing those individual adjustments, interim and final payments.
Under the amendments, the Canadian Wheat Board will be allowed to buy grain on a cash basis. This authority will provide the board with more flexibility in acquiring grain by allowing it to buy grain at prices that represent one time settlements with producers. When used to complement pooling operations, cash trading will tend to reduce delivery uncertainty and increase pool returns, for example by reducing demurrage costs, facilitating additional sales at attractive prices and by improving the overall efficiency of the Canadian Wheat Board's sales program. With this authority the Canadian Wheat Board will be able to bid on varying prices for grain, thereby securing supplies more effectively and improving the efficiency of its sales program and returns to farmers.
The board will be able to manage adjustment payments during any crop year on an expedited basis by removing the need to first obtain cabinet approval.
The federal government currently guarantees Canadian Wheat Board initial payments and adjustments to initial payments made during the crop year. The current requirement that all such payments be approved by cabinet hinders the speed with which the Canadian Wheat Board can adjust prices during the crop year.
Providing for the board to operate in a more businesslike manner by adjusting payments to producers more quickly, the current system of government guarantees and approvals eventually will be amended to apply only to initial payment established at the start of each pool period. After a sufficient Canadian Wheat Board contingency fund has been established, the Canadian Wheat Board will be authorized to make all subsequent adjustments and issue related payments to farmers at its discretion.
I should point out that in its 61-year history the board has never incurred a deficit on an adjusted initial payment on any of the farm pools. The few deficits that have occurred in the Canadian Wheat Board's history have all been relative to the initial price established prior to the start of the crop year.
The Canadian Wheat Board will thus be authorized to establish the appropriate contingency funds to guarantee adjustment payments to farmers and to back cash trading operations. Options for building up such funds include the board's profits on lending operations which totalled about $80 million last year and a check off on producer sales.
These new flexibilities will help put more money from the Canadian Wheat Board operations into the hands of farmers more quickly. There are some additional changes designed to increase flexibility, most of them recommended by the western grain marketing panel.
These amendments will enable the board to offer storage payments, interest payments or other delivery related payments on farm stored grain. This change is intended to encourage producers to sign delivery contracts early in the crop year and will also authorize the Canadian Wheat Board to pay bonuses for good delivery performance by farmers.
Payment of carrying costs will reduce the need for the Canadian Wheat Board to draw grain evenly from across the prairies during the crop year and thus help in logistical planning. Greater logistical efficiency results in higher net returns for farmers.
Under the proposed amendments, the board will be allowed to issue final payments well before January 1 which is not possible under the current act. The Canadian Wheat Board will be authorized by the legislation to close pools on short notice during the crop year and establish a second pool for the balance of the crop year.
Transferable producer certificates will offer greater flexibility by allowing farmers to negotiate how and when to receive payment for grain delivered to the board. Specifically the board will be allowed to establish a program that would provide farmers with a mecha-
nism to trade their producer certificates at mutually agreeable terms.
The development of condo storage facilities and the removal of delivery quotas on non-board grain crops have put out of date a provision that said deliveries of grain to an elevator facility must not exceed established quotas. Because it is necessary for the board to be involved in authorizing the flow of grain to condo facilities, this change will formalize open access by farmers to condo facilities.
With the changes proposed in Bill C-72, the Canadian Wheat Board will be able to become an even more effective marketing agent for western Canadian grain farmers.