End of an era | The powers of the Canadian Wheat Board are put to rest with the close of the crop year. It’s a move some producers have been eagerly awaiting, while others see it as an assault on farmer autonomy. | Stories by Brian Cross, Saskatoon Bureau
After years of debate, farmer protests, legal challenges and the battle between pro-board supporters and open market advocates, Western Canada’s single-desk grain marketing system was officially put to rest this week.
On Aug. 1, Western Canadian farmers, along with private-sector grain companies, independent brokers, marketing consultants and a profoundly revamped version of the Canadian Wheat Board entered a new era of cereals grain marketing on the Canadian Prairies.
The Canadian Wheat Board, a single-desk marketing agency that has been in place for nearly 70 years, will no longer function as the exclusive marketer for wheat and barley in Western Canada.
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Instead, grain farmers in Manitoba, Saskatchewan, Alberta and northern British Columbia will be free to sell their grain to any licensed dealer. It’s a move some producers have been eagerly awaiting, while others view it as a brazen and misguided assault on farmer autonomy and the principles of collective marketing.
Earlier this week, the revamped and voluntary Canadian Wheat Board, now known simply as CWB, marked the beginning of the open market era by launching a new corporate identity and unveiling a new tri-coloured logo.
On July 26, less than a week before the historic transition to an open market, eight farmer-elected directors from the former Canadian Wheat Board announced that they will attempt to take their legal battle opposing the changes to Canada’s highest court.
Led by Alberta grain farmer and former CWB chair Allen Oberg, the eight directors will argue that the federal government acted illegally when it ignored provisions in the Canadian Wheat Board Act and passed Bill C-18, the legislation that stripped the CWB of it monopoly marketing powers.
“We believe that this case raises issues that are important to all Canadians and is worthy of careful consideration by the Supreme Court of Canada,” said Oberg, who was removed from the CWB board table last December.
It could be weeks, if not months, before the Supreme Court decides if it will hear the case.
Last week in Saskatoon, National Farmers Union president Terry Boehm lamented the loss of the Canadian Wheat Board.
Boehm said Ottawa’s decision to turf the single-desk could cost his farm $15,000 or more in an average year.
By some estimates, prairie farmers collectively stand to lose $500 or $600 million per year in foregone sales premiums that would have been secured through the single desk, he said.
Lawyers are in the process of registering two class action suits against Ottawa, seeking compensation in excess of $17 billion for monetary damages suffered by farmers.
“We’ve always understood the value and the power of the single desk and the advantages that it brings to farmers,” said Boehm.
But Alberta grain farmer Brian Otto sees nothing but positive change for barley producers and for the Western Canadian barley industry.
Otto, president of the Western Barley Growers Association, said private industry will be more effective in marketing, particularly when it comes to selling low-grade malting barley to overseas customers that are not looking for premium malting grain.
The new marketing environment will benefit producers by creating new sales opportunities, he said.
It might also entice farmers to increase barley acreage, which has been on a steady decline for the past decade or so.
Most importantly, the open market will provide growers with clearer, more transparent, market signals, said Otto.
“To be quite frank, it’s going to be a lot easier for us to run our farms when we know exactly what we’re going to get paid,” said Otto, who farms near Warner, Alta.
“As of Aug. 1, the marketing decisions are ours. We’ll live with our mistakes but we’ll also be rewarded by our good marketing decisions.”
Bill Gehl, a single-desk advocate who farms near Regina, offered a much different view. He said that the benefits of mandatory grain pooling and single desk marketing allowed the CWB to capture optimal returns.
The single-desk system also ensured that all pool revenues, less a percentage retained for CWB operations, were returned to farmers, he said.
Under the new system, grain handling companies that have already secured a significant share of business in the newly liberalized market, will maximize their profits at the farmer’s expense, he said.
Gehl, a believer in the benefits of pooling, said he will not sell his wheat or barley through the new CWB’s voluntary pooling programs.
Instead, he will market 100 percent of his grain through the private grain companies that he has been fighting to keep out of the market.
“Certainly, I think the loss of our elected directors has had a tremendous negative impact on the Canadian Wheat Board …,” said Gehl, who also serves as president on the Canadian Wheat Board Alliance.
“I don’t have any intention at all of dealing with this wheat board moving forward because it doesn’t represent me at all.”
