The idea has been around for years, but it got one more trip around the track last week as a possible compromise in the bitter Canadian Wheat Board debate.
University of Saskatchewan agricultural economist Murray Fulton suggested to the Senate agriculture committee Dec. 8 that an alternative to the current all-single-desk-or-nothing approach would be to give wheat and barley farmers an open market in North America with the CWB as the sole overseas marketer.
“Such a policy option would allow farmers to sell their wheat and barley directly to pasta plants, maltsters and flour mills in North America, thus allowing market forces to guide economic activity and innovation,” he said.
Read Also
StatCan stands by its model-based crop forecast
Statistics Canada’s model-based production estimates are under scrutiny, but agency says it is confident in the results.
“This option also ensures that the CWB remains a major player in the industry, a player that is able to provide countervailing power, particularly (against) the railways and important public goods.”
However, Fulton said it is a compromise that would have to be decided now because trade rules won’t allow the wheat board’s monopoly powers to be reintroduced once they are lost. He sounded pessimistic.
“The compromise I am discussing will not occur as long as farmers, the industry and government each believe there is only one solution.”
Fulton said the government’s rush to end the single desk is not a good idea because of market imbalances in the grain industry.
“With removal of the Canadian Wheat Board, both the grain companies and the railways will have significant latitude to raise prices,” he said. “Since the conditions for a well-functioning market are not present, full-scale deregulation of the grain handling and transportation system is, in my opinion, a poor public policy decision.”
He said economic analysis suggests the result would be “to both reduce the overall size of the pie that is available to participants and to reduce the size of the slice that is available to farmers.”
