The decision by a previous Liberal government to end government guarantees for Canadian Wheat Board initial payments and export credit sales is in limbo as the Conservative government decides what to do with the CWB, says agriculture minister Chuck Strahl.
The Liberals promised to end the financial backstopping in response to a World Trade Organization trade dispute ruling that said this was akin to export subsidies. In return, the Liberals vowed to preserve the CWB marketing monopoly against attacks from some WTO players.
The Conservatives vow to end the CWB monopoly but insist they can design a system that preserves the wheat board as a profitable option for farmers who want to use it.
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However, with WTO negotiations suspended and uncertainty surrounding a promise by other countries to end export subsidies by 2013, the commitment to end CWB financial backing is in limbo.
Strahl said in an interview July 26 it is too early to tell the status of that Liberal decision.
The Conservatives have started to design a plan to dismantle the wheat board monopoly while vowing to maintain the board as a viable and profitable grain marketing option for farmers. It is a promise CWB supporters say is impossible to keep since the board is effective only because of the monopoly.
“We can’t make a decision on the issue of loan guarantees or pool guarantees in isolation,” Strahl said on the way to a Saskatoon meeting to begin planning the monopoly dismantling with grain sector supporters.
“Changes in the wheat board will be part of a package and decisions haven’t been made about how to make it successful in a dual market, what investments might be needed or policies.”
So it is unclear whether Canada will carry through with its promise to comply with the WTO ruling by ending government support for board payments and sales.
The status of the entire WTO system is in doubt after the late July collapse of negotiations for a new trade rules blueprint.
The Conservatives have insisted that decisions about the future shape and status of the CWB will be made within the domestic Canadian political debate and not at the WTO.
That includes the issue of government support for the board.
“One of the questions we have to decide is what investment is required for capitalizing the board to make it viable in a dual market and how do we best do it,” said Strahl. “I hesitate to make any stand alone pronouncements about this or that part of the board operation until the entire package is together and we see how it works.”
