Killing Canada's Wheat Board

Edmonton Journal, Tuesday, April 17, 2007

Harper gov't is doing to CWB what the U.S. couldn't do by itself
Loss of wheat board would mean loss of power

by Albert Horner and David Orchard
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For a year the Harper government has been threatening to destroy the power of the Canadian Wheat Board (CWB). Agriculture minister, Chuck Strahl, says barley will be removed from the board's jurisdiction by August 1; a decision on wheat will follow.

In the early 1930s, there was no CWB. Prairie farmers took the price offered by the large grain companies or took their wheat home. Grain sold for a few cents a bushel. Farmers were driven off the land in droves.

In response to pressure and thousands of farmers demanding an end to the unfettered power of the grain giants, R.B. Bennett made a historic radio address referring to "unconscionable monopolistic purchasers" and "economic parasites." He set up the CWB as a single seller of prairie wheat. In the 1940s Mackenzie King extended the board's power to include oats and barley.

Starting from nothing in 1935, the board has grown into the world's largest marketer of wheat and barley, one of Canada's biggest earners of foreign currency and perhaps the most prestigious marketing board in the world.

A recent PricewaterhouseCoopers study described as "huge" the $1.6-billion annual economic impact of the Winnipeg-based Board, "with Western Canada as a major economic beneficiary."

As OPEC gave undeniable clout to oil producing countries, so the CWB's quasi-monopoly put marketing power in the hands of farmers.

Since its founding, the U.S. grain companies dominating the world grain trade have fought this impressive upstart. Earlier, they called it "communist." In the last fifteen years, the U.S. has mounted a dozen trade challenges seeking its demise.

The reason is simple. The Wheat Board returns all revenue earned to the farmer, minus a miniscule per bushel administrative charge.

Loss of the CWB would move the Canadian grain trade into U.S. hands virtually over night. Hundreds of millions more in profits annually would drain from the farmer to the "five sisters" that dominate the international grain trade, none Canadian. The Port of Churchill -- with the bulk of its business from the CWB -- and the entire east-west rail system including the great grain terminals in ports from Quebec City to Prince Rupert would be at risk.

If the Canadian Wheat Board goes, who believes the rest of Canada's supply managed agriculture is safe?

Since assuming power, the Harper government has waged an unrelenting attack on the CWB --firing its popular CEO, Adrian Measner, stacking the board with government appointees who detest it, and holding a fraudulent barley "plebiscite" (complete with gag orders, a secret voters' list, traceable ballots and deliberately misleading questions). Still, only 13.8 per cent voted to remove barley from the board.

This unprecedented assault on the internationally respected CWB by its own government has not gone unnoticed. Standard and Poors recently downgraded the board's formerly pristine credit rating, and according to the largest buyer of Canada's wheat, China's Yang Hong, "Once the CWB's single-desk system is abolished, we think the Canadian wheat industry may lose advantages to other competitors."

He said his company may turn to other countries if Canada can no longer guarantee reliable supply and quality.

Mexico's Grupo Altex president wrote, "We would hate to see you adopting the U.S. model, where we have to deal with the large trading houses that always try to take advantage of both farmers and clients like us and very seldom, if ever, deliver what they promise."

But the Wheat Board is not gone yet. For over seventy years it has -- with Ottawa's backing -- withstood American hostility. Now the Harper government is about to do what the U.S. alone has been unable to accomplish; it plans, by order-in council, to strip the board of its marketing power on barley.

Once before, a Canadian government joined the Americans against its own farmers. Following its signature on the Canada-U.S. Free Trade Agreement in 1989, the Mulroney government took oats from the board. In 1993, it tried the same with barley, but was stopped by a successful court challenge. The government changed and held a fair vote among farmers, restored barley to the board, where it has remained ever since, and introduced the Canadian Wheat Board Act, putting farmer-elected directors in control.

This time too, a court challenge may follow. However, as in 1993, only a change of government will secure the Board's future. A Harper majority will see the CWB gone, and quickly. The new Liberal leader, Stephane Dion, behaving more like a friend of the Western farmer than the Alberta-based Harper administration, has promised to restore the board's powers putting full control of its future back into farmers' hands. Whatever changes the CWB needs -- and every farmer knows of some -- will be made by farmers, not imposed from Ottawa or Washington.

Today, the Liberal party is truer to John Diefenbaker's defence of the West than the party claiming his name.



Albert Horner is a retired grain producer and livestock breeder. A four-term Progressive Conservative MP under John Diefenbaker, he lives in Blaine Lake, SK.

David Orchard was a candidate for the Progressive Conservative party leadership in 1998 and 2003. He farms at Borden, SK.