Privatization of CWB assets in secret will help government and grain companies — not farmers, says NFU

(October 23, 2014, Saskatoon) – The privatization of the physical assets of the CWB is fraught with problems, according to an analysis from the National Farmers Union (NFU). Secrecy surrounds the impending deal: the FNA, which is seeking investors, agreed to non-disclosure terms; Agriculture Minister Gerry Ritz withheld all financial information from the public tabling of the CWB annual report; and the CWB is not revealing the criteria it is using to assess competing bids.

“Public accountability has been dismantled along with the single desk,” said Jan Slomp, NFU President. “When the so-called Marketing Freedom Act was drawn up, the government added wording that allows the Minister to keep the public in the dark. How has the CWB used the 349 million tax payer dollars it was allocated by Federal Agriculture Minister Ritz in 2012; how has it used the $145 million of farmers’ money that made up the contingency fund; and how is it using its government guarantee that gives it a triple AAA credit rating? These important issues are all still secret.”

Through reliable sources, the NFU has learned that the government has set criteria for privatization that include further investment in the Canadian grain handling system. The “buyer” of the CWB assets will get to keep both the assets and the money used to pay for them. Long-term farmer equity is not recognized, nor will the price “paid” be disclosed. In January the federal government let a tender to accounting firms to evaluate all CWB assets in the event it is liquidated. While the government claims it does not own the CWB, it must sign off on any privatization deal.

“The CWB is supposed to sell itself and then keep the money. But if the CWB is liquidated instead, who will cash the cheque?” said Ian Robson, NFU Region 5 (Manitoba) Coordinator. “Clearly, this sale is not a business deal – it is a political manoeuvre.”

“The privatized CWB’s footprint would be too small to compete with multinational grain companies even if it had its own west coast port terminal. As a stand-alone company, it would just be a stopping point on the road to take-over by a bigger company,” added Slomp. “Requiring a successful bidder to increase inland terminal capacity just creates a bigger buffer between the farmer and the export customer. As with captive supply in the beef sector, additional storage capacity just makes it easier for grain companies to buy low in the countryside and sell high on the world market.”

“The federal government unilaterally destroyed the single desk system that served farmers and all of Canada very well. The FNA’s initiative will not give control to farmers – it is a distraction to shift attention from Minister Ritz’s incompetence and the economic disaster he set in motion,” said Terry Boehm, Chair of NFU Seed and Trade Committee. “The secret privatization process serves the government’s political purposes and the grain companies’ economic interests, but it just makes a bad situation worse for grain farmers.”

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For more information:

Jan Slomp, NFU President: (403) 843-2068 or (403) 704-4364, cell phone.

Ian Robson, Region 5 (Manitoba) Coordinator: (204) 858-2479

Terry Boehm, Chair of NFU Seed and Trade Committee: (306) 255-2880 or (306) 255-7638, cell phone.

NFU Report: CWB to sell itself, in secret and not necessarily to the highest bidder