After years of wrangling and anguish the Canadian government has finally introduced legislation to kill the Canadian Wheat Board, the largest wheat and barley marketer in the world, writes Ray Dykes.
Although the legislation sets up a voluntary ‘shadow’ CWB, it will in effect end the single desk marketing concept for Canadian farmers, say critics.
“This is not about putting farmers in the driver’s seat — it’s about throwing us under the bus, and handing the steering wheel to huge American and European multinationals who control the world’s grain trade,” says Allen Oberg, chair of the farmer- controlled Canadian Wheat Board of Directors.
If passed – and the Conservative government led by Prime Minister Stephen Harper has a healthy majority — the legislation will immediately remove the ten farmer-elected directors from the CWB and create a new structure made up of five government appointees. In the place of the wheat board, the government is setting up a voluntary organization that is intended to be transitioned into a private, for-profit corporation bringing “an open and competitive Canadian grain market” and new freedom to farmers.
Farmers will be able to forward contract for the delivery of grain under the new system after 1 August 2012.
In the 2010/2011 crop year,Western Canadian farmers earned net revenue of CDN$5.8 billion and exported 11.2mt (million tonnes) of wheat to 42 countries, plus 3.4mt of durum, and 420,000 tonnes of malting barley, down over 3mt overall from the previous crop year.
As politicians debate the demise of the CWB and its monopoly role, some farmers are fighting back with rallies and other protests, claiming they are in the majority who want to keep the board as it is.
Typical was the rally of farmers loading producer grain cars on the farmer owned Battle River Railway in central Alberta late October where protesters held up signs such as: ‘Stop Harper’ and ‘Respect Farmers, Respect our Vote’.
The National Farmers Union is outraged by the legislation and its president Terry Boehm accuses Prime Minister Harper of “wiping his feet on democracy” and says ten times farmers have democratically reaffirmed their support for a strong CWB — in three plebiscites and seven sets of director elections.
In September, the wheat board held a farmer plebiscite which it said showed a strong majority want to retain their ability to market wheat and barley through the single desk system. Some 62% of respondents voted to keep the single desk system for marketing their wheat while another 38% were opposed; and 51% want to keep it for marketing their barley, with 49% opposed to the idea.
As it fights for its life, the CWB has mounted a vocal campaign to try to stop Prime Minister Harper and his agriculture minister Gerry Ritz from killing off the Canadian Wheat Board, but the government insists the move is all about winning freedom for farmers.
“The Marketing Freedom for Grain Farmers Act will give Western Canadian grain farmers the right to choose how they sell their wheat and barley,” says Minister Ritz. “Our government is delivering on our long-standing promise to give Western Canadian grain farmers marketing freedom, just as they have when selling their canola or pulses.”
Ritz says farmers will have the choice of whether to sell on an open market in the best interest of their individual farms and business, or market through a voluntary CWB.
This new market freedom — similar to many other countries in the world — will give farmers the chance to succeed, says Ritz, by being able to sell their wheat, durum and barley at the time they want and to a buyer of their choice.
The governments of Alberta, Saskatchewan and British Columbia — representing farmers who produce 80% of wheat and 90% of barley in Western Canada — support the move to marketing freedom, adds Ritz.
“An open market attracts investment, encourages innovation, creates value-added jobs as well as opportunity for growth and a stronger economy,” he says. “This will allow farmers to individually choose to either compete directly in a strong global marketplace for Canadian grain or market through voluntary Canadian Wheat Board.”
But, the CWB of today won’t be going down without a fight.
CWB Chair Oberg says the legislation means the wheat board will cease to be a farmers’ organization and claims the Canadian government is out of touch with farmers.
“The CWB will no longer be controlled by farmers or focused by farmers,” says Oberg. “This is not about giving farmers choice, it’s about ignoring the choices they’ve already made.
“Farmers chose the CWB single desk in our plebiscite this summer, when tens of thousands voted to keep it,” he adds. “Farmers choose the people who run the Canadian Wheat Board in director elections, and they repeatedly choose farmer- directors who value the single desk.”
Oberg insists the government is mistaken and has no mandate to strip away farmers marketing power.
And he doubts the wheat board will survive without its single desk. “It will be wound down, there’s not too much argument
about that,” says Oberg.The CWB has never been a grain company; it has just been a marketing agency, a seller on farmers’ behalf, and it has never retained any earnings — on 31 July every year everything is paid back to farmers and we start all over again.”
The CWB has no assets and has no capital base and Oberg says to suggest that without a single desk, the wheat board could become a grain company and compete with people who have been in the business for 75 years is a bit nai¨ve.
The Canadian Wheat Board monopoly was imposed on Western Canadian grain farmers by the Canadian Parliament in 1943 when Canada was committed to supply inexpensive wheat to Great Britain during the Second World War.
Legislation was amended in 1998 to pass governance of the CWB from federally-appointed commissioners to a regularly elected, farmer-controlled board of directors. It also enabled creation of new payment programs that gave farmers control over their cash flow.
“The legislation today turns back the clock and erases those gains for farmers,” claims CWB Chair Oberg.
As it exists now before the new freedom format, the Winnipeg-based CWB is one of Canada’s biggest exporters and returns all sales revenue, less marketing costs, to Prairie farmers.
On 26 October, the farmer-controlled board of directors of the CWB announced they were taking legal action and cited the government for breaking the law when it introduced legislation to disband the board without first conducting a plebiscite.
“We have no choice but to take this last stand on behalf of farmers,” says board chair Allen Oberg. “We will not be intimidated by bullies.”