Gerry Ritz has retracted his accusation that the Canadian Wheat Board's chair was "stealing" farmers' money after the federal agriculture minister was threatened with legal action.

"This word was only used figuratively and I retract it," Ritz said in a statement Friday.

"It remains our government's belief that money from the pool accounts is being used for purposes outside the CWB's mandate."

Earlier, wheat board head Allen Oberg released a statement demanding Ritz retract his "slanderous" statement.

"Irresponsible statements made yesterday [Thursday] by Minister Ritz, directly accusing me of 'stealing' farmers' money,' are clearly slanderous and unworthy of a cabinet minister," Allen Oberg said in a statement on Friday. "I call on the minister to retract those statements. Unless he does so, I am personally considering whether to take legal action. His accusation is a serious one."

Ritz's statement had said Oberg "will have to justify why he is stealing an additional $1.4 million of farmers' money on baseless propaganda in eastern newspapers."

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Agriculture Minister Gerry Ritz is under fire for his comments about the chair of the Canadian Wheat Board, although Ritz made a retraction Friday. (Sean Kilpatrick/Canadian Press)

Oberg has been fighting the Conservative government's plan to strip the board of its monopoly. The government has promised farmers that they would be free to choose how to market their own crops by August.

In response, the board has launched a $1.4-million ad campaign against the government's plan.

Oberg has said in a time of economic instability, the federal government is jeopardizing $5 billion in exports and forcing grain farmers into an open market without the board's protection.