OTTAWA (AFP) - A western Canadian grain marketing board this week risks losing its monopoly on 10 percent of the world's malt barley, a key ingredient in beer, as pressure from Ottawa to disband mounts.
The Canadian Wheat Board, which sold 3.5 billion dollars (3.0 billion US) in barley and wheat last year, asked local farmers in a plebiscite ordered by Ottawa whether it should maintain its grip on Canadian barley exports.
The result, due in the coming days, could mean a small drop in the cost of barley in world markets, said analysts. "Beer prices won't tumble, but malt barley prices could weaken," agriculture economist Murray Fulton told AFP.
As well, it could signal the eventual end of the Canadian Wheat Board after a century of controversy, leaving only one "single desk" system for marketing grain in Australia, and bolstering the dominance of a handful of European and US firms in the competing open market system.
About 56,000 western Canadian farmers voted in the barley plebiscite.
A second vote to dismantle the marketing board's wheat cartel could follow, the government said, if the first vote goes its way, affecting 10 percent of global wheat sales and half of all durum wheat used to make pasta.
"Tens of thousands of western Canadian farmers would suddenly be competing against each other to sell to local and international buyers who would try to bid down the price," lamented Adrian Measner, a former board president and fierce proponent of maintaining the farm co-operative's local grain monopoly.
"They need to work together to market their crops, negotiate as a group ... to counter the influence of the big multinational companies that now dominate the international marketplace," Measner said.
"Canadian farmers will be the big losers if the Canadian Wheat Board is disbanded," he said, adding that companies such as Cargil, Louis Dreyfus and Archer Daniels Midland "will be the winners, there's no question."
The Canadian Wheat Board was created in the early 1900s to help Canadian farmers pool their risk during two world wars and the collapse of grain prices at the onset of the Great Depression in 1929.
Its modern rendition has survived more than a dozen US court challenges alleging unfair trade practices, internal dissent, and ongoing strife with Ottawa, its grudging financial backer in past bad growing seasons.
The latest government proposal to end its barley monopoly sparked a public outcry, court challenges, and even cost the board president his job after 31 years of service, for opposing the plan.
Several farmers were also jailed for sidestepping the marketing board, driving trucks full of grain to the United States in "border run protests" to test the limits of the agency's strict rules.
Agriculture Minister Chuck Strahl said Canadian farmers want choice and would "get a better price" for their crops in an open market, indicating that the plebiscite fulfills a Conservative election promise.
"We want to move towards more marketing choice for barley and wheat," he told AFP. "Farmers believe they do better when they have more choices on where they sell their products."
But Measler countered Strahl was comparing the board's pooled rate to fluctuating spot prices, which can be higher only at some intervals, but not on average.
The Canadian Wheat Board has sold wheat and barley to customers around the globe, mostly to Japan, China, the United States, Sri Lanka, Morocco, Algeria, and Saudi Arabia in recent years.
Support for either position is split both geographically and in terms of farm size.
Proponents of the Conservative minority government's agenda welcome more selling options.
Opponents fear stripping the board of its legal barley and eventually its wheat monopoly would leave only a shell, a voluntary marketing board with little clout in world markets.
Owners of small family farms mostly in western Saskatchewan and Manitoba provinces, without the resources to market grains internationally themselves, have come to the Canadian Wheat Board's defense.
But the trend is toward bigger commercial farms, in Alberta province, the Conservative government's heartland, which would rather go it alone.
Copyright © 2007 Agence France Presse.
