The critics who are attacking Canadian Wheat Board orderly marketing powers are fond of citing examples where a farmer near the U.S. border learns that an elevator over the line is offering a higher price that day than the board is. Why, ask the critics, shouldn’t that farmer be allowed to drive over there in his truck and sell grain for the higher price?
There could be a host of answers and complex arguments in response to that, listing the long-term benefits of orderly marketing, and the equity it provides among producers.
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But let’s forget about those for the moment and look at what can happen when farmers make such direct sales.
First, there is the risk that they could spoil markets for the vast majority of other farmers.
If the cross-border flow becomes politically unacceptable to narrow-minded protectionist U.S. politicians and farm-organization demagogues, then the U.S. could slam the border shut. It has shown itself quite capable of taking such action, even in violation of the spirit of signed treaties.
Markets could also be ruined for straight commercial reasons. If U.S. grain buyers find these Canadian trucks are sneaking contaminated or inferior grain into their system, they could take measures against Prairie grain. U.S. maltsters, for example, once cut off purchases from one U.S. region because too many farmers there were delivering barley that didn’t live up to the malting quality it was supposed to have.
In addition to these considerations, there is a basic problem of fairness. When a farmer jumps in his truck to take advantage of a high spot price, that means the premium goes to him alone. If the sale were made by the wheat board, the premium would be added to the pool and distributed among all farmers when the pool is closed and the final payment is made.
So what? It’s his grain, isn’t it? Yes, but the wheat board’s opponents want that same farmer to be able to deliver to the board when it seems to his advantage. That way, the farmer can share premium prices that the board obtains in U.S. and overseas markets.
The board’s opponents want to have it both ways. They want to directly grab any good spot price near them, and ride on the backs of those farmers who do support the board.
To do its job properly, and realize the best yearly average price for all farmers, the wheat board needs commitments of grain.
Farmers who want freedom from such a commitment shouldn’t get the board benefits. If they want to demand freedom from orderly marketing, they should also be willing to be ineligible to market any grain through the board.
