Following is an excerpt from a new book by David Seymour of the Frontier Centre for Public Policy, titled Birth of a Boom: Saskatchewan’s Dawning Golden Age.
Author’s note: The federal government’s decision to offer marketing freedom to farmers should be welcomed, as I wrote in my book, which was published months before the decision became certain – though it is only one of many policy reforms that would take Saskatchewan from good to great. The central theme behind ending the CWB monopoly, making water rights tradable and opening up farmland to foreign investment is giving the agricultural sector the power to choose its own destiny.
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The region that produces half of the world’s traded durum wheat has to import pasta. It has only one pasta factory of its own. Its most important natural resource is not bought and sold on an open market but allocated by a Soviet style system where the government grants allocations based on perceived need. It is illegal for the country’s national pension plan to invest in farms there because some creditors are not residents of Canada.
Saskatchewan’s vaunted agricultural sector is a weird and wacky place, or at least its public policy environment is very odd.
It is true that Saskatchewan is one of the most important producers of durum wheat in the world, yet it has no pasta factories, while neighbouring North Dakota has five. Many farmers blame the Canadian Wheat Board’s monopoly on marketing Saskatchewan wheat for this and other sad states of affairs.
There are no tradable rights for water, and farmers and manufacturers who wish to use water must apply to the (Saskatchewan) Watershed Authority, which then assesses their need and may grant an allocation.
It is also true that the Canada Pension Plan is technically banned from buying farmland in Saskatchewan because some of its creditors, funnily enough including myself, are foreign nationals.
Even Canadian organizations cannot invest in Saskatchewan farmland if they have any foreign owners.
These policies are not in the spirit of a golden society. All of them increase the importance of political decision-making and reduce the ability of individuals and local groups to use their knowledge and create wealth.
Three reforms in agricultural policy would dramatically improve the outlook for agriculture, the industry that gives the province its wheat sheaf emblem.
The first is an end to single desk marketing of wheat and barley by the Canadian Wheat Board, a policy that is not followed elsewhere in the world or even other parts of Canada, and which improvements in communication technology have made an anachronism anyway.
The second is the introduction of tradable water rights. Markets and prices would help answer the question of how best to use water, a resource that will only become more valuable as global demand for food rises.
An end to restrictions on the purchase of farmland by foreign interests would increase the amount of capital available for developing this important part of the Saskatchewan economy, particularly as retiring baby boomers look to cash out of the sector.
The choice for someone who believes in the golden society should be obvious. Ownership restrictions, government water allocation and the single desk are values opposite to what made free trading, individual-valuing Athens, the Islamic golden age and Enlightenment Scotland inventive and prosperous.
All of the examples in this book carry that fundamental distinction at their core.
Saskatchewan agriculture will not wither in the absence of these policy reforms.
Yet all of them would help to make it more productive, diverse and ultimately more interesting.
If Saskatchewan is to extend its golden age into agriculture, then these changes would be a good start.
