November 09, 2011

Calgary: November 9, 2011 – The Alberta wheat and barley industry are well positioned to tap new business opportunities as soon as the Marketing Freedom for Grain Farmers Act is passed. In his remarks to the Calgary Chamber of Commerce today, Agriculture Minister Gerry Ritz reiterated that marketing freedom will not only give wheat and barley farmers the ability to make their own business decisions, but that it will also trigger more economic benefits for the entire grain value chain and Alberta economy.

"Our Government intends to bring marketing freedom to Alberta wheat and barley farmers by August of next year," said Minister Ritz. "An open grain market will attract investment, encourage innovation, and create value-added jobs, not only building a stronger farm gate but also a stronger economy in Alberta."

The Marketing Freedom for Grain Farmers Act will give Western Canadian farmers the right to sell their wheat, durum and barley as they choose, whether that’s individually or through a voluntary Canadian Wheat Board. Last week, the legislative committee passed the bill sending it back to the House of Commons for Third Reading.

"A top priority for our Government is the economy, in which agriculture plays a vital role," said Minister Ritz. "The western Canadian grain industry already contributes significantly to the national economy, but the true economic potential and entrepreneurial energy of the sector will be unleashed once Western wheat and barley farmers have marketing freedom."

Minister Ritz urged Directors of the Canadian Wheat Board to work cooperatively in the best interests of all farmers and CWB staff by focusing more time and resources on making sure the voluntary wheat board has the best possible opportunity to succeed.

Working with Western Canadian grain farmers, their organizations and provincial partners, the Harper Government is leading an orderly transition to market freedom which includes a voluntary Canadian Wheat Board as part of an open and competitive grain market.

The Alberta agriculture and food industry brought $9 billion to the farm gate in total farm cash receipts last year. The industry generated $6.7 billion in exports and employed 70, 000 Albertans.

Further to the Crop Logistics Working Group announcement on Monday, Minister Ritz today announced the organizations invited to participate in the Working Group (Background information attached).

Below is a copy of the speech delivered by Minister Ritz at the Calgary Chamber of Commerce on November 9, 2011

“Thank you.

It’s always a pleasure visiting with the chambers. I was in business myself and I’ve also spent some time as Secretary of State for Small Business and Tourism.  I have enormous respect for what you do. Your members are entrepreneurs.  You are creating jobs, taking risks, investing and reinvesting your own hard-earned money back into your business.

Your hard work strengthens your community and our country. As I said yesterday at the Red Deer Chamber, it’s no accident that Alberta has led the country in economic growth over the past twenty (20) years, and is poised to do so again this year. The reason, in large part, is due to the people right in this room.   As we all know, the petroleum industry gets a lot of credit for this and rightly so.  But the agriculture industry is a major economic driver as well.  And it was the Calgary Chamber that worked with other boards of trade across Canada to help western livestock producers survive a serious financial crisis in 1920.

Times have changed quite a bit since then. Last year, the agriculture and food industry brought nine billion dollars ($9B) to the farm gate in Alberta in total farm cash receipts.  That same industry has generated almost seven billion dollars ($6.7B) in exports and employed seventy thousand (70K) Albertans.  Right across this great country, the agriculture industry accounted for over one hundred billion dollars ($100B) in economic activity and over two million (2.1M) jobs.

Meanwhile, our agriculture exports grew to more than thirty-five billion dollars ($35.6B), the second highest level in history, putting Canada in the top five (5) global agriculture exporters.

Those are tremendous numbers but we know we can and must do better. The wheat and barley industry is also driver of the provincial economy, generating almost one point three billion dollars ($1.28B) in farm cash receipts.

Alberta raked in almost one point five billion dollars ($1.48B) in wheat and barley exports last year. But over the past number of years, we’ve seen the crops that once put Canada on the map declining at an alarming rate. Our Government will continue to work diligently at keeping our economy on the right track.

That’s why, as Finance Minister Jim Flaherty said yesterday, we will continue to be flexible and pragmatic when working to keep our economy strong in this challenging global economy.      While we remain cautious it is worth noting that close to six hundred thousand more Canadians are working today than when the recession ended, the strongest growth by far among G7 countries.

Our Government continues working with you to create the business environment you need to grow and drive our economy.  We have helped build roads and bridges in Alberta to get our products to market. We’re also working to implement our low-tax plan to create jobs and growth.  In less than two months from now, the federal businesses tax rate will fall by a further one point five percentage points to reach fifteen per cent (15%).  Canada will have an overall tax rate on new business investment that is the lowest in the G7.

This commitment is about making Canada a strong destination for investment and jobs.      To further help Canadian workers and employers, like you, our Government announced yesterday that we will reduce the maximum potential increase in next year’s EI premiums from ten cents to five cents per one hundred dollars of insurable earnings. This measure will leave over six hundred million dollars in the hands of Canadians workers and businesses next year. And because you make your money filling orders, not forms, we have also cut government red tape for business by twenty per cent (20%) and of course we strive to do more.   All the while we’ve been steadily eliminating the deficit and we’ll have a balanced Canadian federal budget in just a few years. So we’ve got a strong base to build on.

But one thing I know -- we didn’t get to this point by being complacent and relying on yesterday’s solutions.    Nor did Albertans send us to Ottawa to stick with the status quo.      Since forming Government, we have been working hard with the agriculture industry to help them earn their money from the marketplace.  Working closely with the industry and provincial partners, we’ve worked to maintain, expand and open new international markets.       For instance, we tripled our beef sales to Russia, while securing almost two billion dollars ($1.8B) in canola sales thanks to a temporary agreement with China.

In India, another huge market for Alberta producers, we have an agreement in principal that would secure our pulse business there, which averages over four hundred million dollars ($416M) a year. And we’re working on a comprehensive trade agreement with India to grow our business even further – along with FTAs in other key markets such as Korea, Morocco and of course the EU.  While theses dollars go back to the farm gate they don’t stop there. These dollars buy houses from our realtors and farm equipment from our dealers. They flow into our restaurants and stores. These dollars strengthen our communities and drive our economy.

That’s why farmers require a level playing field to compete and grow their businesses here at home.  Like you, farmers are businesspeople.  Like you, they put their own money on the line to build their businesses and grow their profits.  But the commonalities end there.  Unlike you, Western farmers are denied the right of running their business where it matters most – at the point of sale.

For far too long, they have been shackled an outdated monopoly, even if another strategy would be more profitable.  That’s why we’ve introduced legislation that will give Western farmers the right to choose how to market their wheat, durum and barley – giving them the same freedoms long enjoyed by farmers in Ontario. This legislation is now heading for third reading.

Unlike those who only want to give a percentage of farmers their marketing choice, our legislation will give every farmer in Western Canada the ability to choose how to market their grain. We will not allow an expensive survey to trump farmer’s individual rights.  Instead, every - single - farmer will have the choice to either marketing voluntarily through a reinvigorated Canadian Wheat Board or through the open market. And as soon as the legislation receives Royal Assent farmers, grain companies and the reinvigorated Board will be able to forward contract for the purchase or sale of wheat and barley.

As of August 1, 2012, Western farmers to sell and deliver their grains directly to an elevator or a processor -- be it a pasta manufacturer, a flour mill or any other processing plant. As with any change, there are always those who have trouble understanding how change might be better.

The fact is, today's entrepreneurial farmers are proving over and over that they can -- and will -- help drive our economy if they have control over their farm and over their bottom line.  After all, farmers already decide what to plant and when to harvest. They make marketing decisions on their canola and pulse crops, their peas, lentils, beans, oats and many other crops.    They demand the very same marketing freedom for their wheat and barley.   We will deliver.

Recent history shows the benefits of an open market. As you know, oats was removed from the CWB monopoly in 1989.  In a matter of weeks, announcements were made to build oat processing plants in Western Canada.   Today, Westglen Milling in Barrhead continues to process oats, providing jobs to a rural community and a market for entrepreneurial farmers.      And we are all seeing signs of new investments in anticipation of marketing freedom for wheat and barley.   Just last week I was at Rahr Malting in Alix to celebrate the expansion of their malt barley capacity in anticipation of marketing freedom.  This six-million-dollar ($6M) investment will help farmers better manage their storage risks while ensuring top-quality barley for malt throughout the year.   That means more malt barley moving directly from the combine and a faster return to farmer’s bottom line. More storage capacity means more potential business for our farmers, more jobs for Alberta, and more growth for our economy.     And while some prefer to fear monger about good news like this, business-people like you know that more buyers mean better competition for your product.

I can tell you that farmers are looking forward to the prospect of dealing directly with the malt industry without having to buy back their own crop first.    Barley growers tell me marketing freedom will improve market transparency, allowing producers to lock down price and processors to lock down supply.   All this is great news for our Western economy.

Our Government is working diligently with you and the rest of the value chain to make the road to an open market as smooth as possible.  During our extensive consultations, industry proposed a number of recommendations.  On the issue of access to port terminals, the working group expects, and we agree, that grain companies will be actively competing for grain volume in an open market.  They need volume and they have gone on record saying that they will offer access to get it.

As I have said many times, the right to producer cars is, and will continue to be, protected in the Canada Grain Act.  The Canadian Grain Commission allocates these cars to producers.   This will not change under marketing freedom. In an open market, producers and short lines will be able to make commercial arrangements with grain companies or the voluntary CWB to market their grain.  Shortline railways are expecting some adjustments as they will have more options of marketing partners for the grain volumes they can attract from producers.  There’s no question that producer cars and short line rail will continue to offer an alternative to those producers who want to use them.

One message that has been clear throughout this debate.  The strength of our crop sector, not just for wheat and barley but for the full range of prairie crops, relies on an efficient and effective logistics chain from farm to customer. We must ensure that all players have the access to rail service they need, to continue to provide a competitive option for farmers. I bet there are a few people in this room who know Jim. Those that do know that Jim brings a depth of experience and expertise in building consensus among industry leaders and government. Jim will bring together shippers, railways and other key players to develop a template for service agreements and a streamlined commercial dispute resolution process.  Once the facilitation process is complete, our government will table legislation that will give all shippers the ability to establish service agreements with the railways, promoting more predictable and efficient service.

Building on the rail freight service review, I announced earlier this week the creation of a Crop Logistics Working Group.   The Crop Logistics Working group will identify issues to be pursued in the Transport Canada facilitation process flowing from the Rail Freight Service Review.  While it is a forum focused on contributing to the general rail facilitation process, it will also be able to address any transportation and supply chain issues that may arise from the transition to marketing freedom.    I’m pleased to further announce today that the working group will include experts from the entire value chain.

Co-chairing the working group with my Deputy Minister will be Gordon Bacon, CEO of Pulse Canada.  Gordon has been a staunch advocate for the pulse industry and through this he has been determined to find efficiencies and added value in the rail and logistical system.  His forward thinking, positive approach will be a tremendous asset to the working group and for our Government.  The group will include representatives of wheat, barley, canola and other special crops growers.   Representatives from the elevator, terminal, shortline and producer car sectors have also been invited. We hope the new working group will be able to meet and hit the ground running sometime in the next few weeks.    The bottom line is we want to ensure that the agriculture sector is well positioned to capture any efficiency and all the opportunities throughout the value chain

On the other hand, Mr. Oberg is wasting farmers’ time and money on a baseless court case and reckless propaganda.  Just last week it was reported that he had stolen from farmers pockets once again.  It’s really a head scratcher but try to stay with me - he is spending one point four million dollars ($1.4M) on advertising in such places as Eastern Canada’s Globe and Mail. And that’s on top of the tens of millions he’s already wasted buying the NDP lunch recently in Quebec City, his expensive survey and his Lakers. My only guess as to why he would advertise in Eastern Canada where they have marketing freedom is that he’s trying to expand his audience to the non-farmer in hopes of attracting support.  Regardless of his reckless and misguided actions, the Harper Government intends to pass this vital legislation by the end of the year to bring certainty and clarity to all aspects of the Western Canadian grain trade.  Not only does parliament have the right to change legislation but our Government has the responsibility to deliver on the promises we made to Western Canadians.  Meanwhile, Mr. Oberg is doing a great disservice to the staff at the Wheat Board and the farmers that he claims to represent.

Instead, we will work with the staff at the Wheat Board and the farmers who wish to continue to use it to make sure that a voluntary Board has the best possible opportunity to succeed.

Like you, our Government is looking ahead with optimism at the unlimited potential for Canadian agriculture.  Alberta’s farmers grow world-class food in a global marketplace that is ripe with opportunity.  We want to put Alberta wheat and barley farmers back in the driver’s seat so they can seize these opportunities.  I’m proud that we are delivering on our longstanding promise to deliver marketing freedom.   Where some see only challenges, business minded people like you see only opportunities.  We know the sky will not fall under marketing freedom.  Far from it.   The sky will be the limit.

 

Thank you.”