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The End of the Canadian Wheat Board: What's at Stake?

Posted: 08/22/11 02:51 PM ET

This summer, Canadian grain farmers have more on their minds than just the coming harvest. Shortly after achieving a majority in the recent federal election, the Conservative government announced plans to act on its long-standing plan to end the Canadian Wheat Board's (CWB) monopoly on the marketing of spring wheat, durum and barley.

The complexities of grain marketing are not something that typically captures the attention of urban Canadians. Nevertheless, if the government proceeds as planned, the outcome could mean more than just the dismantling of the CWB and a fundamental reorganization of the grain system in Canada.

The contemporary CWB was established in 1935 to guarantee wheat pool payments to prairie farmers during the Depression. In 1942, the single desk system was established, whereby farmers were mandated to market their crops through the CWB as a means of managing the grain supply during wartime. Following the war, the single desk monopoly was retained to increase the market power of Canadian producers on the volatile world market.

The CWB is collectively controlled and funded by the farmers on whose behalf it negotiates sales and to whom its proceeds are returned. The CWB also plays a key role in coordinating orderly transportation of farmers' grain to market. Since 1998, the CWB has been governed by a 15-member board of directors, 10 of whom are directly accountable to the Prairie farmers who elect them. The single desk is always an issue in board elections. Farmers have consistently elected boards whose majorities support retaining the single desk.

This leads one to wonder whose interests might be served by dismantling the CWB.

Beyond ideology, the desire to eliminate the single desk has been partly driven by a minority of very large, and very vocal, producers whose size makes them confident they could fare better marketing their grain on their own. These large players are also well-positioned to negotiate favourable terms with the handful of private conglomerates that now dominate grain-handling on the prairies.

Not surprisingly, these large grain companies also oppose the single desk and the CWB. Giants such as Viterra, Inc. and James Richardson International stand to gain significantly from the demise of the CWB and the leverage it affords to producers.

As Andrew Paterson, CEO of Paterson Global Foods said recently, "We've been preparing for this for five years." It has also been widely-reported that massive U.S. agribusiness conglomerate Bunge Ltd. has announced plans to make a major play in the newly open Canadian grain market.

With the end of the mandatory single desk, responsibility for grain marketing will shift from a collective organization over which farmers have democratic control to a "competitive" system dominated by a few transnational conglomerates over which they have none.

Absent the security and competitive advantage provided by the CWB, the ultimate demise of small-scale grain farming in Canada becomes increasingly likely. Once this happens, the economic and social infrastructures of grain-dependent rural communities could atrophy beyond repair, and an entire way of life will have been legislated out of existence.

This will not register on the world grain markets nor, sadly, will it be noticed in most of urban Canada.

Still, the potential demise of the CWB suggests that those of us who live in cities have good reason to pay attention to what is happening in the countryside. Something to do with the character of Canadian democratic life might be at stake.

In its campaign against the single desk, the Conservative government has routinely invoked the language of "choice," framing its intentions in terms of expanding farmers' options for marketing their produce. State intervention that forcibly undermines the CWB will accomplish exactly the opposite.

The government disingenuously suggests that the CWB could continue to market grain for farmers who choose its services in a competitive environment. As CWB Chair Allen Oberg has pointed out, lacking grain-handling infrastructure of its own, and without adequate assets to build or acquire it, the CWB would be beholden for storage and transportation to the very companies with which it is supposed to compete. Under these conditions, absent regulated access to facilities, a voluntary single desk marketing agency would be impossible to sustain.

Thus, the end of the CWB will remove from farmers the very choice that a majority of them are most likely to make, as confirmed in repeated surveys and board elections: to market their grain collectively, through a single desk that is directly accountable to them, rather than to distant shareholders.

Electoral success in the west has led the Conservative government to claim a democratic mandate to enact this radical transformation of economic and social life on the prairies. The CWB is currently asking producers themselves to vote on whether they prefer to sell their wheat and barley through an open market, or to continue with the mandatory single desk. It is widely expected that a majority of farmers will once again choose the latter option.

Perhaps this explains why Agriculture Minister Gerry Ritz has declared in advance that the results of the CWB's democratic plebiscite are irrelevant to the government's plans.

This alone should provoke the concern of city-dwellers. In light of what is happening to the Canadian Wheat Board and the communities it serves, we might ask ourselves: which essential institution of Canadian public life will be next and what, if anything, will we be able to do about it when the time comes?

Darin Barney is Canada Research Chair in Technology & Citizenship and Associate Professor of Communication Studies at McGill University. His present research, funded by the Social Sciences and Humanities Research Council of Canada, investigates the social impact of technological change in the grain economy on the Canadian prairies.

 
 
 
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11:09 AM on 10/18/2011
Now, they could be mistaken, but I have not heard one small-scale grain farmer (and I know a fair number) side with the CWB on this issue. I think Barney's article is largely based on a slippery slope fallacy with unlikely causal links. Normally, I think collectives can play an important role, but there is nothing normal about the CWB's business model. Someone who makes crafts to sell would be outraged if he was told there was only one place to sell them, at a price he himself did not set. Farmers who find themselves in the same situation are outraged, too.
09:41 AM on 08/23/2011
As a farmer elected director to the CWB in District 2, west central/southern Alberta, producers here have supported marketing choice since the first directors election in 1998. My predesessor even went to jail and served a 62 day sentence for donating a bag (one bushel) of wheat to a Montana 4H club in 1996 (serving his sentence while he was a CWB director). He along with the majority of producers in district 2 want choice. The CWB holds annual producer surveys, the most recent one (June/11) showed once more significant declines in support for the single desk. Barley has never had over 50% support for the monopoly and sits at 37% currently. SO why is the CWB still handling barley when we say we listen to farmers? Farmers under the age of 45 are the most wanting of chan ge. To all this ,most want the CWB to move into a voluntary marketing agency, allowing true choice. It is our wheat and barley we are running our own businesses.
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john frodo
armchair expert
09:09 AM on 08/23/2011
if it is not broke why fix it?
04:51 AM on 08/23/2011
There are many farmers, who do not feel that they have been well served the CWB. Most Canadians are unaware that Ontario producers, for example, are not required to market wheat through the CWB. You do not hear demands from Ontario to have the CWB market their products? No. Why not?

We grew wheat once and never did it again. You sign a contract, which really is not a contract as the only obligation is on you.. They do not store it, you do. They determine what portion can be delivered and when. They tell you the price. If you do not like the service grow something else, and that is exactly what farmers in the west have been doing. Wheat acres have been dropping for years.

The whole exercise made me feel like an indentured servant.

The CWB can continue to exist but they should not hold the monopoly. If there is a collective of framers who chose to martet through them, no problem. Without the monoply you will see alternatives. There will be an increase in "artisan" wheats for example, there will be more value added produciton. and the sky will not fall.
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arkymorgan
Nobody knows the trouble I've been...
09:37 PM on 08/22/2011
Write your MP, write your MPP/MLA, write Mr. Harper.

It may do no good - but at least, with tens of thousands of emails and letters, the PM & co. cannot say they were not aware that Canadians opposed this move.
08:13 PM on 08/22/2011
Once again, by stealth and incrementa­lism Stephen Harper implements his far right, neocon ideologies­, assaulting the middle class and championin­g global, multi-nati­onal conglomera­tes.

Be it jets, prisons, mandatory sentencing­, war crime deportatio­ns, environmen­tal issues, - the list is long - the Harper regime continuall­y and systematic­ally disregards the concerns of affected members, and arrogantly dismisses the input of social, scientific­, and economic profession­als when it doesn't align with their right-wing doctrines.

This is the politics of control, of an authoritar­ian Prime Minister. This is politics of fascism.
09:16 PM on 08/22/2011
"This is the politics of control, of an authoritar­­ian Prime Minister. This is politics of fascism."

Absolutely. How do we combat this tyranny? We don't have recall, we don't have impeachment, even bad press is meaningless to this man. Is there any mechanism other than insurrection that would bring about some meaningful representation to the 60% of us (who voted) that didn't vote for this government?
07:12 PM on 08/22/2011
I opened this page yesterday with the intention to 'get to it' shortly. Now it's today and after reading your column I feel bad that I didn't read it yesterday but totally depressed that I am the first to make a comment.

I live in Toronto, average citizen, what can I do Darin? This sounds like the end of the world for these farmers.

I have read so many stories about behemoths like Monsanto and watched helplessly as some of the best arable land in Canada is buried under acres of cookie cutter houses.

Any suggestions?

How about a CWB Co-op with an IPO? I'd buy shares and I think if you and others could get some traction with this travesty maybe millions across Canada would do likewise.

Folly maybe but I get heartsick watching this great country dismantled for the benefit of a few.

How about a nationwide unofficial referendum to remind "The Harper Government" that he will never get another mandate if he continues down this path, one that includes a significant number of policy changes that the majority weren't schooled on.