CWB replaces DPCs with no-tonnage limit program

The Canadian Wheat Board plans to replace its daily price contract (DPC) pilot program with a new, no-tonnage limit producer payment option (PPO) for the 2008-09 season.

The new PPO — still being developed in consultation with farmers, the board said — will not have the same restrictions on tonnage commitment and time frame as the DPC.

Full details will be announced before the start of the 2008-09 crop year, the board said.

“Farmers want more, not fewer options, which is why we are replacing the DPC with a new program that will be much more accessible to all producers while more sustainable from a risk-management perspective,” CWB CEO Ian White said in a release Wednesday.

The two principles guiding all the PPOs offered by the CWB are sustainability over the long term and accessibility to all farmers who want to participate, the board said. The CWB’s board of directors, which reviews PPOs to ensure they meet these two fundamental criteria, decided at its March board meeting to end the DPC.

The DPC has been limited in scope since it was first introduced in 2005-06, due to the amount of unhedgeable risk involved, the board said.

The DPC for this crop year operated with a tonnage cap of 650,000 tonnes and a per-farm limit of 5,000 tonnes — and filled up on the first day sign-up was available, the board noted.

The new program, however, will have no tonnage limit. It will provide market-pricing opportunities for all farmers, and should be sustainable from a risk-management perspective, the CWB said in its release.

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