CALLS by politicians and farm groups to change the rules governing marketplace competition and to boost the powers of the Competition Bureau are well intended.
But rhetoric that blames the state of market concentration in agriculture on the Competition Bureau detracts from the real issue, which is how to shift the balance of power and put more marketing strength into farmers’ hands.
The reasons for the complaints are obvious. Farmers have seen mergers and acquisitions reduce their marketing choices on both the buying and selling ends of the market.
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But the Competition Bureau’s role, in so far as mergers are concerned, is only to ensure marketplace competition will not be unduly damaged by such actions. It does not encourage new competition and that is not its role.
The bureau has bared its teeth on several recent occasions. It has ordered Agricore United to sell one of its Vancouver port grain terminals, a matter still before the courts. It has also refused to allow Saskatchewan Wheat Pool and James Richardson International to operate their west coast facilities under a joint operating agreement. This also remains unresolved as the two companies try to have the order reversed.
In the cattle industry, the bureau ruled it could not disallow Cargill’s purchase of
Better Beef because the latter’s plant in Guelph, Ont., and Cargill’s Calgary-area plant operate in distinct markets and little competition exists between them.
And when the bureau explored actions of major meat packers after many complained that packers were reaping excessive profits while cattle producers struggled with fallout from the BSE crisis, it found no evidence of illegal action.
Market dominance is not illegal, the bureau pointed out. Only in cases where a company abuses its position, through actions to keep out competitors or in cases of collusion, is the bureau able to step in.
Yet before farmers call too loudly for the Competition Bureau to regulate the open market, they should carefully map the problem and the measures required to fix it. The bureau already possesses a broad mandate. It serves as a watchdog to oversee and enforce appropriate behaviour within the fair market system.
During this election campaign, there is bound to be more rhetoric about the need for a tougher Competition Bureau with more sweeping powers. But if change is necessary to encourage new investment and more competition, that is not the business of the bureau.
Governments since the 1990s have preached that larger Canadian companies are more efficient and therefore better able compete worldwide.
Now, in some cases, the market needs rebalancing.
To do that, new policy directions and legislation are needed. The leadership in creating an economic climate that attracts competition must come from government itself.
