Green Lentils, Prairie Farmers and the
Single Desk Debate
Western Canadian farmers are currently in the middle of a
plebiscite on whether the Canadian Wheat Board (CWB) should maintain farmers’
marketing monopoly over barley.The plebiscite
question set by the federal government is so biased that the results are easily
predictable – farmers will most likely choose the ‘dual market’ option as a
realistic choice.Under the so-called
dual market, farmers can either choose to market their barley through the CWB
or they can choose to market their barley outside the CWB. In reality, this
latter option means selling to one of a handful of grain multinationals, such
as Cargill, Louis Dreyfus, Bunge, Sask Wheat Pool (controlled by the American multinational ADM) and the company that will be created out
of the merger of Winnipeg-based Agricore United and James Richardson
International.
While the Conservative government is arguing that the dual market
option will result in farmers getting more money for their barley, all evidence
suggests the opposite is true.The most
recent report on the subject, from University
of Saskatchewan
agricultural economist Murray Fulton, concluded that without its monopoly on
the sale of grain, the CWB would not be able to add value for farmers.
Certainly the experience with other crops suggests that in the
absence of a single-desk, farmers are not able to get the best possible price
for their product.This was the
conclusion of a recently released report that examined Canada’s green
lentil industry.The report, prepared
for the Saskatchewan Pulse Growers by agricultural consultant Marlene Boersch,
is generating controversy amongst those opposed to the CWB’s single desk. The
western Canadian pulse industry has tended to be dominated by farmers opposed
to the CWB, and their rhetoric about the benefit of the free market for farmers
is well known.The board of directors of
the Saskatchewan Pulse Growers commissioned the study “because of concerns
regarding the declining profitability of green lentils for growers and
producers.”Since the report’s release
in January, the organization has refused to comment on the its
conclusions and is instead in the process of consulting with its members on the
findings.
On the surface, Canadian green lentils share much in common with
Western Canadian durum wheat.Canada is the
dominant player in the international green lentil market, accounting for 80 per
cent of world markets.Western Canadian
durum represents close to 75 per cent of the global durum market.However, while marketing through the CWB has
meant durum farmers have been able to get premium prices for their products in
different markets, the opposite has been true for green lentil farmers.
According to Boersch, lentil producers in Canada have not
been able to get good prices for their products on the world market, even in
markets where they are the dominant supplier.Indeed, she concludes, the more dominant a share Canada has in
any particular market, the lower the price farmers are getting for their green
lentils.“This suggests that Canada is more
a price taker than a price setter when it reality it should act as the price
setter.”Boersch presents two possible
solutions to deal with the situation: 1) the creation of a single-desk
marketing board for lentils or 2) the adoption of an American-style form of
funding lentil producers to protect them from market fluctuations.
Without one of these solutions, Boersch concludes, farmers
will continue to loose money on the green lentils they produce.