The Canadian Wheat Board has rejected a proposal to exempt 25 percent
of western Canadian wheat and barley exports from its monopoly.
The marketing agency says the plan would take money out of farmers’
pockets and mark the beginning of the end for single desk marketing.
“(The) proposal would not provide farmers with marketing choice,” said
a CWB analysis of the plan.
“The proposed dual market environment would simply be an interim step
to a fully open system.”
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
The proposal, which would also remove the CWB from the domestic market
and create an open market for exports of wheat and barley products, was
presented to the board by Grain Growers of Canada in April.
The board turned it down in a June 17 letter to grain growers president
Brian Kriz.
CWB chair Ken Ritter said in an interview that the 25 percent exemption
would eliminate the board’s ability to extract premium prices from the
market by virtue of its monopoly.
“It would do away with the value of single desk selling,” he said.”The
exemption would have the capacity to lower farmers’ returns by up to
$160 million a year for wheat alone.”
Kriz said he was disappointed by the board’s response, which he
described as simply a rehashing of the same old arguments.
“We put forward what we thought was a pretty legitimate attempt to
offer some choice.”
He said it now seems clear there is no point in trying to work with the
board to develop alternatives to the existing system.
“They had to keep the gates on the Berlin Wall, and that’s what the
board is doing,” he said.
Ritter characterized the grain growers’ proposal as a political
document that’s not backed up by an analysis of the net impact it would
have on farmers’ incomes.
“In my view, proposals that are based on pure ideology without any
analysis or assessment of the value of the proposal are of little or no
appeal to most farmers,” he said.
The board is a business enterprise with a clear mandate to maximize
farmers’ returns, he added, and its policies have to be based on
“results, not beliefs.”
He said the grain growers’ plan simply doesn’t stand up to scrutiny or
rigorous economic analysis.
Kriz rejected the board’s contention that a dual market would
inevitably lead to the demise of the board and a completely open
market. But if farmers are given a choice and opt for the open market,
he said, so be it. He believes there is growing support among farmers
and decision makers for an end to the board’s monopoly.
“The people who support this idea are credible,” he said, singling out
the Alberta government and the House of Commons agriculture committee.
That committee recently issued a report recommending that the board’s
export monopoly be suspended for an unspecified trial period. Since
then, prime minister Jean Chrétien has reiterated the government’s
support for the board’s single desk marketing powers.
Kriz said this fall’s CWB director elections will give farmers a chance
to show their frustration with the existing system by voting for
candidates who support a dual market. However, he acknowledged that
with the drought, low grain prices and pressures on the international
trade front, farmers may not be interested in getting into a debate
about the wheat board.
“When things are going great, this issue can be front and centre again,
but when things are stressed, it’s almost frivolous talking about it.”
Grain Growers of Canada is made up of 12 grain and oilseed industry
commodity groups from across Canada.
