Canadian farmers see pasta as a path to profits
WINNIPEG, MANITOBA — One could argue that the problem of cereal farmers getting "no respect" goes back at least to the early chapters of the Bible, where it is reported that Jehovah preferred Abel's lamb to Cain's grain.
In any case, the prairie farmers of western Canada, facing grain prices below the cost of production, are in crisis. One way out they see is in adding value to their product by making pasta.
"The world will pay for food, but they seem to have learned they don't have to pay for a commodity," says David Schnell, of Lampman, Saskatchewan, chairman of the Prairie Pasta Producers' Co-op. "The farmer needs to be higher up on the food chain."
But there's a bureaucratic tangle. The law requires farmers to sell their output to the Canadian Wheat Board and buy the grain back before they turn it into pasta they dream of selling in Italy and other European markets.
"Our very survival in western Canada depends on being able to add value," says Jim Pallister, who grows beans and wheat outside Portage la Prairie, Manitoba.
In the view of Mr. Pallister and other farmers, "the dead hand of the Wheat Board," has impeded their profit potential.
Since 1943, the Wheat Board, based here in Winnipeg, has had a statutory monopoly as the marketing agency for wheat, durum (used in pasta), and barley grown in western Canada for both domestic consumption and export. The idea behind the policy is simple. "If farmers sell as one, they have market power," explains Robert Roehle, vice president for communications at the board.
Across western Canada, farmers deliver grain to the grain elevators that punctuate the flat vastness of the prairie. Upon delivery, the board makes an initial payment, usually about 75 to 80 percent of the final price. The balance is paid at the end of the year. "We pool across time and across markets," says Mr. Roehle.
Pallister says the Wheat Board's bulk grain-handling system is not attuned to today's market realities. He sees the future of agriculture in specialty crops, such as herbs and spices, and marketed over the Internet and grown to the specifications of customers around the world.
Roehle, however, all but rebuffs the idea. It's one thing to sell a consumer product at a premium, like pink jogging shoes for $300, he says. But the buyers of Canadian wheat aren't grocery-store shoppers, but hard-nosed millers and bakers interested mainly in consistency and predictability.
The "new generation" of farmers, he says, are trying to take an intermediate product and sell it as a niche product. Referring to the enormous ships that transport Canadian grain from Vancouver and the ports of St. Lawrence, Roehle says, "I don't know what niche marketing is when you're loading a 100,000-ton tanker."
"Canadians grow up knowing we have the best wheat in the world," he says. Wheat accepted by the board must be a known pedigree. Otherwise it's just feed grain. It's a bulk handling system, but it offers a quality control that gives Canadian wheat a market edge, Roehle says.
Over the years, some Canadian farmers have illegally sought to get better wheat prices by circumventing the board - driving their trucks across the border and selling the grain in the United States. To Roehle, the "new generation" co-ops, like Mr. Schnell's, are simply "a new way of running the border without getting your trucks seized."
He's heard all the stories, like the one about the farm couple with a flour mill in their front yard who were required to sell their wheat to the board and buy it back. But he defends the decision as critical to maintaining the board's monopoly.
Schnell sees changes coming. In recent days he has begun a series of meetings in 30 different towns across the prairies, north and south of the border, trying to talk up participation and investment in the new Prairie Pasta Producers Co-op. It has 660 members so far, and he hopes to double that. The group is looking to buy a pasta-making plant.
One bellwether, he says, is the the Saskatchewan Association of Rural Municipalities, long a supporter of the Wheat Board, which recently passed a resolution calling for its reform.
After a year's negotiations, Schnell says, the board is granting the co-op a break on administrative costs and has agreed to let members use its grain-elevator system, which will save them from having to transport their grain to the pasta plant.
"We're going to do this," Schnell says of the farmers' plans to make pasta. "But we're expecting future reform of the board."
(c) Copyright 2000. The Christian Science Publishing Society