Friday, January 26, 2007

On market opportunities

The Leader-Post highlights the role the Canadian Wheat Board plays overseas, as the security that comes from the CWB as a supplier has helped to make Canada an integral part of China's food supply:
Saskatchewan strengthened its arguments for the retention of the Canadian Wheat Board’s role as a single-desk marketer of western wheat and barley by adding the Chinese government and industry’s voice to the debate...

Saskatchewan Agriculture Minister Mark Wartman, who is on a trade mission to China and Japan, told reporters Friday in a teleconference from Beijing that there was strong support for the CWB as it exists today.

“We met with people who have been buying grain, a major corporation here, the Chinese Oil and Food Corporation (COFCO). COFCO was very clear with us about how important the Canadian Wheat Board was as a single-desk seller to providing them with quality grain and malting barley and wheat," he said.

“Clearly we have heard that echoed from a number of sources here that they just don’t want to see an American-style open market."

Wartman said the food and grain processors he met with expressed a desire to continue their relationship with the CWB. Since the 1960s the CWB has sold more than 115 million tonnes of wheat to China.

“One of the positive thrusts is that they are putting more land into corn production. The people we spoke to (Friday) said that it is their expectation they will be wanting to buy more wheat from us. The sales of malt barley are very important, they like our barley and are interested in continuing those sales relationships," Wartman said.

“They want to know that they can get the quality wheat we can provide and the high quality malting barley we can provide."

The Chinese have had a good long-term relationship with the CWB and in their discussions with the federal government they have urged Ottawa not to undermine the CWB which is the foundation of the trading relationships between the two countries, Wartman said.

In 2005 China purchased $752 million in exports from the province, according to Saskatchewan Agriculture and Food.
Now, it would take a rare observer indeed to conclude that such a present impact on Saskatchewan's economy isn't something worth taking into account. And if indeed China's current agricultural plans are based in substantial part on the secure source of Canadian wheat provided by the CWB, it seems entirely likely that the future opportunities may only expand as China moves away from growing its own wheat - while even a temporary loss of the CWB's ability to deliver grain could force China in another direction and permanently affect our ability to export to the world's most populous country.

Not that such considerations are likely to put a dent in the Cons' distaste for the Wheat Board. But it should be a significant factor both when producers vote on what role they want the Board to play, and when Saskatchewan voters decide whether to hold the Cons accountable for putting ideology ahead of the best interests of the province.

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