With another two months to go before Parliament can resume consideration of the government bill to amend the Canadian Wheat Board Act, farmers have an opportunity to press for improvements to the bill.
In the view of many, it would have been better if the bill, with all its flaws, had been passed before Parliament adjourned this month. That would have enabled farmers to elect the new CWB directors before spring seeding.
But since that didn’t happen, the next best approach is to use the delay to improve the bill.
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One of the first provisions farmers should target is the one to create a “contingency fund” that would cushion the new CWB against losses.
The bill would retain the government guarantee for the board’s initial payment, but remove guarantees on interim payments as grain is sold during the year. That could expose the new CWB to losses if world prices suddenly plunge below the interim price level. The board could also incur losses using its proposed new powers to buy grain in cash markets.
So, according to the government, a fund is needed to cover such contingencies. The trouble is that this fund would come out of farmers’ pockets, through a levy on all grain sold.
If, as some have suggested, a fund of more than $500 million will be needed, that would mean an average loss of more than $5,000 for each of about 100,000 permit-book holders.
In remarks to pool delegates last month, wheat board minister Ralph Goodale tried to remove such concerns. There has never been a loss on interim payments, he said, suggesting that perhaps only one token dollar need be set aside for that account.
The risk of cash trading, he said, would depend on the extent the board used that new power. Since the intention is for the board to do only a limited amount of cash buying (for example, if it again finds itself short of barley to meet export commitments), he suggested that contingency might require just a relatively small amount of money to be set aside.
The trouble with such assurances is that they are not legal commitments. They do nothing to restrict radically new directions that the board may wish to go in future.
That leads to the issue of who will control the board. The federal government would appoint the CEO and five of the board’s 15 directors, while there are no details on how farmers will elect the other 10 directors.
As the bill now stands, farmers are being asked to take a lot on faith. The lawmakers should do better than this.
