The market-oriented George Morris Centre says the end of the Canadian Wheat Board monopoly will be good for the prairie grain economy, spurring investment and expanded acreage.
The report last week from the Guelph, Ont.-based agricultural think tank was manna from heaven for Conservative MPs who were rushing a bill that will end the CWB monopoly next year through a legislative committee.
They cited the George Morris study often during two nights of hearings.
“There is no evidence of impending collapse in western Canadian grain markets due to the federal government’s decision on the CWB,” said the report. “The prospect exists for wheat and barley to develop more like canola, oats and pulses in a less regulated environment under a voluntary CWB. If this were to occur, it would lead to significant investment, growth and economic opportunity in western Canada.”
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George Morris Centre analysts said that acreage and investment in the industry increased in Ontario and Australia once a seller’s monopoly was abolished.
“The Ontario and Australian experience with wheat – initially in a mandatory single desk marketing arrangement and then in an open marketing system – is instructive,” they wrote. “Wheat acreage in Australia and Ontario has grown. It is also evident that the Australian and Ontario wheat industries did not implode following the removal of single desk marketing.”
However, opposition MPs and pro- CWB monopoly witnesses at the committee responded that while the grain sector did not disappear, it has become increasingly controlled by grain companies and not farmers.
The GMC report said private sector investment in new varieties should follow the end of the CWB monopoly, as it has in oilseed and pulse industries. It said wheat and barley acreage on the Prairies has fallen in recent decades, along with productivity gains.
And while the CWB has added various pricing options to try to mirror options available to producers in the private sector, there is a lack of transparenc y about future prices and producers still must wait for a final payment, it said.
When he appeared before the legislative committee on Bill C-18 Nov. 2, agriculture minister Gerry Ritz noted the various studies from market-oriented research think-tanks that show “there has been no cost benefit” from the monopoly.
“We have an equal number of studies we can produce,” interjected New Democrat Pat Martin.
“An equal number of studies have disproven the myth and what has happened is we’ve lost wheat, durum and barley acres, the wheat board has become a price taker not a price setter anymore in the global reality,” said Ritz. “They’re now the third largest trader in Canada alone.”
